Industrial profits in China fell 4.3% y/y in June, following a 9.1% drop in May, according to the National Bureau of Statistics.
First-half 2025 profits declined 1.8%, compared to a 1.1% drop from January–May.
The decline was driven by persistent producer deflation, weak domestic demand, and ongoing global trade uncertainty.
Price wars in industries such as autos and solar panels have intensified margin pressures, prompting Beijing to pledge policy measures
For more on this: Chinese policy shift to “Anti-involution” :intense, unproductive competition that leads to inefficiency rather than progress.
Factory-gate prices (PPI) saw their steepest deflation in nearly two years, as overcapacity and sluggish demand persisted.
Officials expect profits may improve due to:
Regulatory actions targeting excessive price-cutting.
A government trade-in scheme, similar to “cash-for-clunkers”, to boost consumer demand.
The Industrial profits data covers industrial firms with annual revenue over 20 million yuan (~$2.8 million).
This article was written by Eamonn Sheridan at investinglive.com.
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