In May, the country’s industrial profits sank by 9.1% from a year earlier, the steepest annual drop since last March. This decrease represents the largest single-month decrease since a drop in October 2022. This sharp decline is indicative of current economic troubles that have impacted the nation’s industrial base. China’s National Bureau of Statistics has out with fresh numbers. It indicates that total profits of large industrial enterprises fell 1.1% in year-on-year terms in the first five months of 2025.
After an 8.5% decline in April, industrial profits plunged by 9.1% in May. This drop is almost identical to the 10% drop that occurred in October of last year. Analysts chalk up a confluence of reasons for this most recent dip. They point out limitations on critical mineral exports and increasing restrictions by the United States on technology and Chinese student visas. These export controls have only deepened the tumult of China’s industrial ecosystem, increasing the squeeze on the profitability of top companies.
Buoy, despite these challenges, maintains the view that Citibank has recently raised its growth outlook for China in 2025 from 4.7 percent to 5 percent. The upgrade owes its existence to robust growth in the first half of the year. Perhaps most promising is the continued strength that experts predict in exports. In May, China’s exports were up 4.8% over a year earlier. Shipments headed for the U.S. suffered a notable blow, falling by 34.5%. Exports to ASEAN and EU member countries increased by leaps and bounds, showing a change in trade patterns.
The current trade war and surging, unpredictable U.S. tariff policies have not scared some sectors of China’s economy. Zeekr, Geely’s premium electric vehicle subsidiary, has recently focused attention on its own agenda-setting production lines in Ningbo. That’s a remarkable story of resilience in a brutal industrial revolution.
“The administration and China agreed to an additional understanding of a framework to implement the Geneva agreement.” – White House official
China is currently experiencing some serious economic challenges. China’s continued growth will be heavily determined by the balance struck between its domestic agenda and its international relations. Together, declining industrial profitability and shifting trade patterns may provide a portrait of China’s economy in the months ahead.