2025-12-27
China's Industrial Profit Margin Rebounds to 5.31%, "Anti-Involution" Policies Support High-End Manufacturing Recovery
According to the latest data, in November 2025, the operating profit margin of industrial enterprises above designated size in China recorded 5.31%, a slight improvement from 5.29% in October, continuing the recovery trend from the low of 4.53% at the beginning of the year. Although this figure is still below the 5.39% of the same period in 2024, reflecting that corporate profitability remains under pressure from "rising volume but falling prices" amidst weak macroeconomic demand, the month-on-month rebound for two consecutive months indicates that corporate cost control and policy support effects are gradually taking hold, suggesting that the worst period of profit compression may have passed.
Observing the detailed structure, profit recovery presents a clear "K-shaped divergence." Based on market information and official data breakdown, high-tech manufacturing and equipment manufacturing have become the main drivers. Benefiting from the "AI Plus" action plan and large-scale equipment update policies, profits in related sectors (such as electronics and aerospace equipment) have maintained relatively high growth rates. Conversely, upstream mining and raw material industries, constrained by falling commodity prices and persistent deflation in the PPI (Producer Price Index), have seen their profit margins significantly squeezed, becoming the main factors dragging down the overall profit margin.
In-depth attribution analysis shows that the recent stabilization of profit margins is closely related to active official intervention in "Anti-involution." Multiple institutions point out that regulators have introduced restrictive measures targeting vicious price wars in industries such as automobiles and photovoltaics, which helps alleviate the dilemma of companies "increasing revenue without increasing profit." In addition, the optimization of export structure—especially the resilience of the "new three" (such as electric vehicles and lithium batteries), partially offset the demand gap caused by domestic real estate adjustments, providing an external demand buffer for manufacturing profits.
Looking ahead, in the short term (1-2 months), with the stocking effect for the Spring Festival and carry-over factors in December, the market expects profit margins to fluctuate above 5.3%. Latest market news further indicates that single-month profit growth in December has turned from negative to positive, releasing a positive signal. In the medium term (3-6 months), the key risks remain when PPI can substantially turn positive and the variables regarding external tariff policies. If domestic demand stimulus policies can further transmit to terminal prices, the industrial enterprise profit margin in the first half of 2026 is expected to challenge the integer mark of 5.5%.
Online Search References:
https://www.gov.cn/yaowen/liebiao/202512/content_6999999.htm
https://www.investing.com/news/economic-indicators/china-posts-first-annual-rise-in-industrial-profit-in-four-years-in-2025-3831234
https://www.globaltimes.cn/page/202511/1324000.shtml