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China’s industrial profits fell at their fastest pace in more than a year last month, as Xi Jinping’s economic planners struggled to contain the fallout from industrial overcapacity and lacklustre consumer confidence.

Profits at industrial companies with annual revenues of more than Rmb20mn ($2.8mn) fell 13.1 per cent in November compared with a year earlier, data from the National Bureau of Statistics showed on Saturday, deepening from a 5.5 per cent decline in October.

The November slump brought profit growth for the year to date down to 0.1 per cent above the same period in 2024, down from 1.9 per cent growth in the January-to-October period.

China’s economy has struggled to find long-term drivers of strong growth in the wake of the collapse of the debt-fuelled property sector, which is now entering its fifth year of crisis.

While China has relied on exports of low-cost goods to boost headline growth, the world’s second-biggest economy has been wracked by deflationary pressure, weak domestic demand and falling investment. The producer price index has been mired in negative territory for three years.

The latest factory data highlights the challenge for Chinese policymakers to boost confidence among the country’s companies and consumers, despite a truce in the US-China trade war and a boom in high-tech manufacturing exports.

Yu Weining, NBS chief statistician, said China’s economy faced “structural adjustment pressures” as it transitioned from “old to new” growth drivers, adding that the international environment was also marked by “many unstable and uncertain factors”.

The central government in Beijing has long resisted calls from economists — both inside and outside China — to unleash broad-based stimulus and roll out deep social security reforms to boost sentiment and kick-start the economy.

It has also increasingly taken aim at what authorities call neijuan, or “involution” — excessive industrial competition that they blame in part for overproduction that is driving down prices.

In an article published in Qiushi, the flagship magazine of the Communist party’s central committee, Xi this month urged officials to work more urgently to address the problem of insufficient domestic demand.

“Expanding domestic demand is related to both economic stability and economic security; it is not an expedient measure but a strategic move,” he said.

Xi also reiterated calls for officials and companies to exercise more discipline over investments, following earlier criticism of industrial over-investment, which has resulted in brutal price wars and unfair supplier treatment.

Earlier this month, the NBS reported that fixed asset investment declined 2.6 per cent for the January-November period on a year earlier. Retail sales, seen as an indicator of household demand, expanded 1.3 per cent in November on a year earlier, the slowest pace of growth since December 2022. Both data points were below analysts’ expectations.

The latest NBS data highlighted some bright spots in China’s manufacturing industries. High-tech manufacturing and the auto industry posted year-on-year improvements of 10 per cent and 7.5 per cent, respectively.

Additional contributions from Tina Hu in Beijing

The University of the Philippines joins the nation in mourning the passing of Diosdado Banatao (1946–2025).

A towering figure of Filipino excellence, Dado Banatao’s life and work made a lasting impact on the nation. Through his remarkable achievements in technology and his steadfast commitment to education and innovation, he inspired generations of Filipinos to pursue excellence with purpose.

His support for the University of the Philippines reflected a deep belief in the power of knowledge to uplift lives and strengthen the country. We honor Dado Banatao for his enduring contributions, his generosity of spirit, and his dedication to nation-building.