China industrial profits surge 15% to start year, but oil price shock threatens outlook

Chinese industrial firms saw their profits surge in the first two months of this year as officials pressed ahead with efforts to contain the fallout from industrial overcapacity and lackluster consumer demand.

Industrial profits jumped 15.2% from a year earlier in the January-February period, the National Bureau of Statistics data showed Friday, extending a sharp rebound from a 5.3% jump in December.

For the entire year of 2025, China’s industrial profits rose 0.6% from a year ago, snapping three consecutive years of declines as officials reined in aggressive price competition and companies doubled down on exports to tap overseas demand.

Beijing has sought to contain the fallout from the disruption to oil shipments from the Middle East, triggered by the U.S.-Israeli attacks on Iran. Tehran has since closed the Strait of Hormuz, a critical waterway for energy flows, to most commercial vessels, upending the global energy markets.

As the impacts of the rise in global oil prices began seeping into the economy, China raised the ceiling prices for retail gasoline and diesel earlier this week but moderated the hike to about half of what would normally be applied, in a bid to cushion the shock to consumers.

But surging energy prices are expected to impact the world’s second-largest economy less than most other countries, due to its massive oil reserves and alternative energy sources. Iran has also continued to send millions of barrels of crude oil to China since the war began.

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