China's Major Industrial Firms Profits Drop 13.1% YoY in November

China’s National Bureau of Statistics announced that in November 2025, profits of industrial enterprises above the designated size nationwide fell 13.1% year-on-year, with the decline widening by 7.6 percentage points compared to October, marking a consecutive two-month drop and the largest decline in over a year. From January to November, cumulative profits reached RMB 6.63 trillion, up 0.1% year-on-year, with the growth rate down 1.8 percentage points from the first ten months, indicating a clear slowdown in the recovery momentum of industrial profitability. The sharp monthly downturn reflects that weak domestic demand has offset export support, intensifying pressure on corporate profits.

Detailed Data and Contributing Factors

• By economic type, from January to November, profits of state-controlled enterprises fell 1.6% year-on-year, joint-stock enterprises fell 0.4%, and private enterprises fell 0.1%, while foreign- and Hong Kong, Macao, and Taiwan-invested enterprises grew 2.4%.
• By industry, mining profits fell 27.2% year-on-year, with coal mining down 47.3% and oil and natural gas down 13.6%; in contrast, manufacturing profits rose 5.0%, and electricity and heat supply rose 8.4%.
• Among major sectors, computer, communication, and electronic equipment manufacturing rose 15.0% year-on-year, electricity and heat production up 11.8%, non-ferrous metal smelting up 11.1%, automobile manufacturing up 7.5%, and agricultural and sideline food processing up 4.8%; while non-metallic minerals, chemical raw materials, and textiles fell 4.6%, 6.9%, and 8.2% respectively.

Overall, insufficient domestic demand has put downward pressure on prices, with industrial enterprises’ operating profit margin declining to 5.29%, down 0.08 percentage points from last year, while costs rose 1.8% year-on-year, squeezing profitability. Inventory and financing pressures have also increased, with finished goods inventory turnover days extending to 20.5 and accounts receivable collection period lengthening to 70.4 days. Under the influence of international uncertainties and industrial restructuring, traditional industries continue to face pressure, whereas emerging and high-tech sectors are relatively supported by export momentum and policy incentives.

The sharp drop in industrial profits in November highlights the fragility of the overall recovery, with cumulative growth largely supported by manufacturing and new growth drivers, while weak domestic demand and rising inventory remain key concerns. In the short term (1–2 months), if price declines ease and domestic demand stimulus policies are strengthened, the year-on-year profit decline could narrow to single digits; otherwise, negative growth may persist. In the medium term (six months), with continued anti-involution policies and sustained high-tech export momentum, cumulative profits are expected to return to growth above 3%, with equipment manufacturing serving as the main driver.

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