China: Industrial Profits Fall by 0.3%

While trade disputes between China, the European Union, and the United States escalate – on March 27, China filed a lawsuit against the USA with the World Trade Organization (WTO) dispute settlement mechanism – the Chinese president continues to hold talks with Western industry leaders. On Friday, March 28, Xi Jinping is scheduled to receive executives from major German automakers BMW and Mercedes, as well as representatives from US microchip giant Qualcomm. According to the US News website, representatives of foreign companies arrived in Beijing this week to attend the China Development Forum (March 23-24), which coincided with escalating trade tensions between China and the USA.

China’s National Bureau of Statistics (NBS) announced that in the first two months of 2025, “industrial profits of Chinese manufacturers fell 0.3% from the same period last year, compared with an 11% increase in December last year.” Industrial profits fell 3.3% in 2024, leading to the third consecutive year of decline. Chinese authorities attribute this trend to the ongoing difficulties of economic recovery from the COVID-19 pandemic, as well as to heightened political and economic tensions in China’s relations with the EU and the United States.

Tensions between China and the West are likely to continue to rise after Beijing rejected two financial offers, one from Britain regarding British Steel and another from the United States aimed at acquiring TikTok.

On Thursday, March 27, it was reported that China’s Jingye Group, which owns British Steel, rejected the UK government’s offer of 500 million pounds ($600 million) to “support the company and encourage it to switch to greener production.” The Financial Times reports that unions are expressing fears that “consultations could begin in the coming days over the redundancies of more than two thousand British Steel employees. In particular, the historic Scunthorpe plant (pictured), home to the last two operating blast furnaces in the UK, is under threat.”

In the United States, China also rejected a proposal by President Donald Trump, who allowed the possibility of a “slight reduction” in customs duties levied on Chinese exporters in order to finalize a deal on Chinese app TikTok. The app has been at the center of a bitter political standoff between Washington and Beijing for months. Chinese Foreign Ministry spokesman Guo Jiakun said that “China’s position against the imposition of additional duties remains clear and consistent and has nothing to do with the TikTok sale.”

On January 17, the US Supreme Court unanimously approved a law to ban TikTok from the country for national security reasons, potentially paving the way for a complete blocking of the app. Two days later, on January 19, Apple and Google blocked TikTok downloads in their app stores. The decision triggered a wave of negative reactions due to the immense popularity of the Chinese video platform among American users, especially young people. To avoid a sudden shutdown of the service, Trump signed an executive order delaying the ban’s enactment for 75 days, giving the government time to find a negotiated solution.