YICHUN, CHINA – FEBRUARY 06: Mechanical arms work on the production line of electronic products for new-energy vehicles in an intelligent workshop at a factory in the high-tech industrial park on February 6, 2025 in Fengcheng, Jiangxi Province of China.
Zhu Haipeng | Visual China Group | Getty Images
China’s industrial profits fell 0.3% from a year ago in the first two months of 2025, official data showed Thursday, as the economy faces heightened global trade tensions.
Profits at industrial firms have declined for three consecutive years, reinforcing calls for policymakers to step up support for the faltering economy.
U.S. President Donald Trump has imposed 20% additional tariffs on Chinese goods in just a little over two months in office. He announced on Wednesday night stateside auto tariffs of 25% on cars “not made in the U.S.,” starting April 2.
Beijing has set an ambitious growth target of “around 5%” for this year, a target that analysts say will require stronger stimulus measures to offset the impact from higher U.S. tariffs.
Chinese policymakers rolled out multiple rounds of stimulus measures in the second half of last year, including expanding a consumer goods trade-in program to boost demand that helped the country meet its official growth target of 5%.
Exports, which contributed nearly 20% to China’s GDP last year, lost some momentum at the start of this year as the front-loading by exporters to get ahead of new tariffs under Trump’s second presidency showed signs of tapering off.
Consumer price index in February fell into negative territory for the first time since early last year as households remained cautious amid a prolonged real estate slump.
The nationwide unemployment rate was at its highest in two years at 5.4% last month while urban jobless rate for 16- to 24-year-olds, excluding students, rose to a four-month high of 16.9%.
Meanwhile, some Wall Street banks have turned more upbeat on the country’s outlook this year, citing green shoots in the economy.
Over the past month, economists at HSBC, ANZ and Citi have raised projections for China’s GDP growth this year to 4.8%, 4.8% and 4.7%, respectively, from their previous forecasts of 4.5%, 4.3% and 4.2%.
Morgan Stanley also raised its forecast to 4.5% this year from 4.0% previously on robust activity data at the start of the year.
Retail sales, a consumption gauge, rose 4% in the January-February period from a year ago, a faster pace than December, while fixed asset investment and industrial output both grew more than expected.
