In recent years, China’s economy has moved away from the high-speed growth trajectory that once defined it, entering instead a more complex and contradictory stage. The headline figure for 2025—industrial companies’ total profits rising by just 0.6 percent to 7.39 trillion yuan—may look positive at first glance. Yet beneath this modest increase lie serious challenges: persistent U.S.–China trade tensions, tariff wars, structural inefficiencies, and the broader uncertainty clouding the global economy.

The trade conflict with the United States remains one of the most significant risk factors for China’s economic outlook. Tariffs imposed by Washington have raised costs for Chinese exporters, particularly in electronics, machinery, and technology. Profit margins in these sectors have narrowed considerably, and the first half of 2025 reflected this pressure. Many companies were forced to scale back production or search for alternative markets, underscoring the vulnerability of China’s industrial base to external shocks.

Nevertheless, the second half of the year brought some relief. Progress in tariff negotiations created conditions for a partial recovery, with industrial profits rising 5.3 percent in December. This rebound........

© AzerNews