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China Moves to Rein In Price Wars as Industrial Profits Shrink Further

Authorities vow new rules to curb unsustainable price wars, considering a trade-in scheme to boost consumer demand

Workers work on a production line, manufacturing tank containers at a factory in Nantong, Jiangsu province, China April 7, 2025. cnsphoto via REUTERS/File Photo
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Overview

  • Industrial profits fell 4.3% year-on-year in June, extending May’s 9.1% drop and pushing half-year earnings down 1.8%.
  • Factory-gate prices recorded their steepest two-year deflation in June, squeezing profit margins across sectors.
  • State-owned enterprises logged a 7.6% profit decline in the first half, while private and foreign-invested firms saw 1.7% and 2.5% gains.
  • Beijing plans to tighten oversight of industries such as autos and solar accused of unsustainable price-cutting.
  • Officials are weighing a cash-for-clunkers style trade-in scheme and broader market reforms to boost domestic demand before key political gatherings.