TL;DR summary:
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Industrial profits fell 13.1% y/y in November, the steepest decline in over a year
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Weak domestic demand and factory-gate deflation outweighed export resilience
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Coal sector profits slumped sharply, dragging aggregate performance
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Autos and high-tech manufacturing remained relative bright spots
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Markets continue to expect further policy support in 2026 to stabilise growth
China’s industrial sector suffered its sharpest profit contraction in more than a year in November, underscoring the strain from weak domestic demand even as exports showed relative resilience. Official data released over the weekend showed profits at industrial firms fell 13.1% year-on-year,
- accelerating sharply from a 5.5% decline in October
- and marking the steepest drop in 14 months.
For the first eleven months of the year, industrial profits rose just 0.1%,
- slowing sharply from 1.9% growth recorded through October
- major drag from the coal mining and washing industry, where profits plunged more than 47%, reflecting falling prices and subdued domestic demand
Figures from the National Bureau of Statistics point to continued pressure on corporate margins from persistent factory-gate deflation and sluggish household consumption. The deterioration came despite better-than-expected export performance, highlighting an uneven recovery increasingly reliant on external demand rather than domestic momentum.
Sector performance was uneven. The automotive industry posted a 7.5% rise in profits, while high-tech manufacturing stood out with a 10.0% increase, signalling that policy-backed “new economy” segments continue to outperform traditional heavy industry.
In a statement accompanying the data, NBS chief statistician Yu Weining said the profitability recovery still requires stronger foundations amid global uncertainty and ongoing structural adjustment
