China’s industrial firms return to profit growth in 2025 after three-year slide

What happened:
China’s large-scale industrial enterprises recorded a modest recovery in 2025, with profits returning to growth after three consecutive years of decline, official data showed on Monday.

Key numbers:
According to the National Bureau of Statistics (NBS), total profits of industrial enterprises above designated size stood at 7.4 trillion yuan ($1.06 trillion) in 2025, marking a 0.6% year-on-year increase. In December alone, profits rose 5.3%, a sharp rebound from a 13.1% contraction in November.

Why profits improved:
The NBS attributed the turnaround to stronger macroeconomic support and structural upgrades across the industrial sector. Authorities rolled out more proactive policy measures through 2025 while accelerating the push towards new industrialisation, helping stabilise production and improve profitability.

Manufacturing leads the recovery:
Manufacturing remained the biggest contributor, with profits rising 5% year on year to 5.69 trillion yuan. The utilities sector — covering electricity, heat, gas and water supply — also posted strong growth, with profits up 9.4% to 872.1 billion yuan.

At the same time, operating revenue of large-scale industrial enterprises rose 1.1% to 139.2 trillion yuan.

New growth drivers emerge:
Equipment manufacturing stood out as the strongest growth engine, with profits climbing 7.7% in 2025. This segment alone added 2.8 percentage points to overall industrial profit growth, making it the largest single contributor.

High-technology manufacturing also delivered a strong performance, with profits surging 13.3%, far outpacing the broader industrial average.

Traditional sectors adapt:
Officials noted that traditional industries also improved profitability by upgrading technology and boosting efficiency, allowing them to develop new productivity drivers and exceed average growth levels in some cases.

The bigger picture:
The return to profit growth signals a gradual strengthening of China’s industrial economy, supported by policy coordination, innovation-led sectors and ongoing structural transformation — though the pace of recovery remains measured rather than robust.