Chinese corporate earnings have started to pick up, helped by growing exports to Southeast Asia and government efforts to spur consumer spending.
Net profits at mainland-listed companies rose 1% on the year in the January-June half, reaching RMB 1.6 trillion (USD 224 billion) for the first increase for this period in three years. It marked a turnaround from a full-year profit decline of more than 10% in 2024.
The total excludes financial companies. Nearly all of the roughly 5,300 companies compared had reported earnings by the end of August.
With exports to the US falling under pressure from the Trump administration’s tariffs, Chinese industry saw notable growth in Southeast Asia.
Listed steel companies’ profits more than doubled. Baoshan Iron & Steel, part of top global steelmaker China Baowu Steel Group, posted a 7% gain, marking its first increase in four years for the January-June half.
Among machinery makers, Sany Heavy Industry logged a 46% profit increase on a 12% rise in international revenue from its core business.
Appliance makers benefited from Chinese government incentives for buyers of new products. The sector saw a roughly 13% increase in net profit, with Midea Group enjoying a 25% gain.
Profit jumped 33% at semiconductor companies, a faster pace than the 11% gain for the first half of 2024. The industry is undergoing a government-led effort to build up the domestic supply chain—an environment that favors such equipment makers as Naura Technology Group, which saw revenue grow 30% and profit rise 15%.
Contract chipmaker Semiconductor Manufacturing International Corporation (SMIC) logged profit growth of roughly 40%. Artificial intelligence chip designer Cambricon Technologies, hailed by some as China’s answer to Nvidia, swung to a profit.
“As China’s leadership under [President] Xi Jinping continues to offer massive subsidies and tax breaks to advance homegrown chip production, this will provide earnings support” in the sector, said Naoki Tsukioka of Japan’s Mizuho Research & Technologies.
But many other sectors struggled in the first half—notably real estate, where 46 of 100 listed companies posted net losses. Leading homebuilder China Vanke’s loss topped RMB 10 billion (USD 1.4 billion), while peer China Evergrande Group was delisted from the Stock Exchange of Hong Kong in late August.
No end is in sight to the country’s real estate slump. Prices of new homes fell from the previous month in more than 80% of 70 major cities in July, according to the National Bureau of Statistics.
Solar panel makers including JinkoSolar and Longi Green Energy Technology suffered losses as an oversupply pushed down prices on their products.
Automakers emerged with a small profit decline despite government aid as price competition intensified. They face a similar production glut weighing on revenue. GAC Group reported a net loss, while SAIC Motor and Great Wall Motor saw their profits fall. Electric vehicle market leader BYD’s profit growth slowed compared with a year earlier.
Listed companies’ total first-half revenue was down from a year earlier in a sign of deflationary pressure. China’s overall economic performance in H1 2025 shows that stimulus measures had some effect. But since July, indicators suggest a slowdown.
Economic growth in the second half will be in the mid-4% range, followed by growth of less than 4% in 2026, predicts Yusuke Miura of Japan’s NLI Research Institute.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.