FX.co ★ Industrial Profits Slip 1.8% YoY in H1

In the first half of 2025, profits among China's industrial firms saw a year-on-year decline of 1.8%, amounting to CNY 3,436.5 billion, marking a more significant drop than the 1.1% decrease observed between January and May. This downturn highlights ongoing concerns over deflation and the increasing uncertainty in trade resulting from broad U.S. tariffs. State-owned enterprises experienced a sharper contraction in profits, falling by 7.6% compared to a 7.4% decline in the earlier period, while the growth in the private sector slowed significantly, registering only 1.7% against a previous 3.4%. Industry-wise, profit declines were noted in coal mining (-53.0%), oil and gas extraction (-11.5%), chemical products (-9.0%), textiles (-8.1%), and non-metallic minerals (-5.4%). Conversely, some sectors showed profit growth, with agriculture leading at 22.8%, followed by ferrous metal smelting and rolling (13.7%), electrical machinery (13.0%), non-ferrous metal smelting and rolling (7.8%), general manufacturing (6.5%), heat production (5.6%), special equipment (4.4%), automobiles (3.6%), and both computers and communications and other electronic equipment at 3.5%.