In 2025, China’s industrial profits increased by 0.6% year-on-year, ending three consecutive years of decline, and manufacturing output continued to expand despite weak domestic demand.

Growth is accelerating Growth from January to November was 0.1% period, according to data from the National Bureau of Statistics.

Xu Tianchen, senior economist at the Economist Intelligence Unit, said last year’s recovery was driven by policy intervention, particularly Beijing’s opposition to steep price cuts and corporate efforts to expand overseas.

Industrial profits rose 5.3% year-on-year in December, the best performance since September, when profits soared 21.6%. Profits fell in the first two months, down 5.5% in October and 13.1% in November.

China’s factory activity resumed growth in December after eight consecutive months of contraction, partly due to Stock up before the holidays before the Lunar New Year in February, an official from the statistics bureau said.

Fierce price wars engulfing multiple industries last year hit profits at China’s major industrial companies hard as sluggish consumer demand left companies struggling with overcapacity.

Beijing appeared to take some solace from overall economic growth last year, which hit the official target of 5%, helped by strong export growth as a year-long Sino-U.S. trade truce curbed higher tariffs.

Economists, however, called for further policy support to boost domestic demand and overall economic growth. Retail sales will grow 3.7% year-on-year in 2025, lagging overall economic growth and a 5.9% expansion in industrial output.

Yang Mu, an official at the Chinese Ministry of Commerce, said at a news conference on Monday that Beijing would step up efforts to boost household spending on cars, home appliances and electronic products, while also targeting service sector consumption.

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