Industrial profits in China fell 4.3% y/y in June, following a 9.1% drop in May

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).