China’s industrial profits fall 5.5% in October, weakest in five months

China’s industrial firms saw profits drop 5.5% in October from a year earlier, marking their worst performance in five months. The decline comes after two months of strong growth and reflects renewed pressure on the manufacturing sector.

Data from the National Bureau of Statistics showed that profits for the first ten months of the year rose 1.9%, slower than the 3.2% increase reported between January and September. The drop coincided with heightened trade tensions between China and the US, including threats of new tariffs before both sides reached a temporary agreement at the end of the month.

Mining companies were among the hardest hit, recording a profit slump of nearly 28% so far this year. Manufacturing firms saw profits rise 7.7%, while utility companies posted a 9.5% increase. Carmakers recorded a 4.4% gain. State-owned firms saw flat profit growth, while foreign-invested firms posted a 3.5% rise and private firms saw profits increase 1.9%.

China’s broader economic indicators also signaled slowing momentum in October. Manufacturing activity contracted more than expected, retail sales grew at their slowest pace in more than a year, and fixed-asset investment fell for the first time since 2020. Industrial output grew 4.9%, slightly below expectations. Urban unemployment remained at 5.1%.

Despite the weaker data, economists expect China to meet its full-year growth target of around 5%. Analysts say the economy may grow at a similar pace in 2026, though weak domestic demand and continued price pressures remain concerns.