China’s Industrial Profits Jump, Ending Three-Month Decline
By Fan Qianchan
China’s industrial profits grew at their fastest pace since November 2023 in August, ending a three-month losing streak as government support policies took hold and a low comparison base from last year flattered the reading.
Profits at major industrial firms surged 20.4% year-on-year in August, a sharp reversal from a 1.5% decline in July, data from the National Bureau of Statistics (NBS) showed Saturday. For the first eight months of 2025, profits rose 0.9% from a year earlier, marking a return to growth and improving from the January-to-July period.
The turnaround suggests that Beijing’s stimulus measures are beginning to filter through to the corporate sector, offering a sign of stabilization in the world’s second-largest economy. However, persistent financial strains, highlighted by historically long payment collection times, indicate the recovery remains fragile and uneven.
Yu Weining, chief statistician at the NBS’s industry department, said that industrial firms’ revenues grew at an accelerated pace of 1.9% year-on-year in August. Yu said that costs per 100 yuan ($14) of revenue fell year-on-year for the first time since mid-2024, helping lift the profit margin of major industrial firms to 5.83%, an increase of 0.9 percentage points from a year earlier.
In the January-to-August period, manufacturing profits rose 7.4% year-on-year, while profits in the utilities sector, which consists of power, heat, gas and water, jumped 9.5%. The mining industry remained a weak spot, with profits falling 30.6%, though the decline narrowed.
Within manufacturing, equipment-makers continued to serve as a ballast for growth, with profits rising 7.2% during the eight-month period. Propelled by increased demand, higher prices and lower costs, the raw materials sector saw a significant improvement as profits expanded 22.1%, with the steel industry returning to profitability. Profits in the consumer goods manufacturing sector also turned positive, growing 1.4%.
Private-sector companies led the recovery, with profits growing 3.3% in the first eight months. In contrast, state-owned enterprises saw profits fall 1.7%, though that was a narrower decline than in the first seven months.
Despite the improved profitability, signs of financial stress persist. At the end of August, the average collection period for accounts receivable at major industrial firms stood at 70.1 days, up 3.7 days from a year earlier and remaining at historically high levels throughout the first eight months of this year. The liability-to-asset ratio for these firms edged up to 58%.
Contact editor Lin Jinbing (jinbinglin@caixin.com)
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