This episode contains segments on:
- China January-May industrial profits;
- US-China trade talks in London;
- China May official purchasing managers’ index; and
- New tax credit policy for FIE reinvestments.
Listeners are also invited to join an event From Global Trends to Local Insight – Understanding Consumer Behaviour in China on 9th July in Beijing or online.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China industrial profits January-May 2025 (NBS)
https://www.stats.gov.cn/sj/zxfb/202506/t20250627_1960270.html
Details of the US-China trade talks held in London (MOFCOM)
https://www.mofcom.gov.cn/syxwfb/art/2025/art_00a79a2980e44ee8b8a2325786979e47.html
China official PMIs, June (NBS)
https://www.stats.gov.cn/sj/zxfb/202506/t20250630_1960283.html
New tax credit policy for FIE reinvestments
https://www.mofcom.gov.cn/zcfb/wgtzgl/art/2025/art_6454974b7ef047aa8bece340c5898950.html
Chamber event: From Global Trends to Local Insight – Understanding Consumer Behaviour in China
Transcript:
XINHE: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
XINHE: This episode was recorded on 2nd July 2025.
(MUSIC)
XINHE: According to data released by the National Bureau of Statistics on 27th June, in the January-May period, profits at larger industrial firms in China declined at the sharpest year-on-year rate.
MARIANN: Industrial profits dropped 1.1 per cent in the first five months of the year compared to the same period last year. Total profits for the first five months of the year were at the second lowest level of the past five years. A breakdown by the three key industrial sectors showed a significant drop in mining profits and a continued slowdown in the increase of manufacturing profits.
The Chamber’s Business Confidence Survey 2025 found that European businesses’ concerns over economic headwinds weigh on sentiment over future profitability and growth, with record high levels of respondents expressing pessimism over their two-year outlook in both regards. A key challenge for profitability is deflation: producer prices declined for the 32nd consecutive month in May 2025.
(MUSIC)
XINHE: In a statement released on 27th June, China’s Ministry of Commerce confirmed that the United States and China reached additional agreements during their trade talks held in London on 9th and 10th June.
MARIANN: New details of the bilateral trade framework include a pledge from China to speed up the export of rare earth minerals to the US by reviewing and approving export applications that meet the stipulated conditions. The statement also said that the US will cancel a series of restrictive measures against China in return, but it did not give further details on which measures would be revoked.
Crucially, at the London meeting, the two sides reaffirmed the implementation of the agreement reached during trade talks held in Geneva in May. A key breakthrough at the Geneva meeting was that the two sides agreed to remove 91 per cent of the tariffs mutually imposed in April. A further 24 per cent of tariffs were suspended for 90 days. These moves brought US tariff rates on Chinese goods to 30 per cent, while US imports to China are currently subject to 10 per cent tariffs.
(MUSIC)
XINHE: Data published by the National Bureau of Statistics on 30th June showed that manufacturing activity in China continued to decline in June. However, the rate of contraction narrowed as supply and demand both picked up from the previous month.
MARIANN: The official manufacturing purchasing managers’ index or PMI stood at 49.7 points in June. This was the highest level in three-months, but it still missed the 50-point mark, which separates growth from contraction. It was the second month in a row when large manufacturing firms were the only ones able to expand their activity, with their smaller counterparts still reporting contraction. Overall, both production and new orders increased, however, growth in demand was moderate. New export and import orders both continued to fall, and headcount reduction continued as well.
The official non-manufacturing PMI, which comprises construction and services data, stood at 50.5 points in June. This was the second highest level recorded in 2025 so far. While subindexes improved from the previous month, most key indicators, including new orders, sales prices and employment remained in contraction territory.
(MUSIC)
XINHE: On 30th June, the Ministry of Finance, the State Administration of Taxation and the Ministry of Commerce jointly announced a new tax credit policy for the reinvestments of foreign investors’ dividends In China.
MARIANN: According to the announcement, when foreign-invested companies that are resident in China fund their direct investments in the country from dividends accumulated domestically, they will be granted a ten per cent tax credit. Qualifying investors will also be able to carry forward unused credit. The measure retroactively takes effect from 1st January 2025 for a three-year period, meaning that investors can apply for tax credits on reinvestments made since the beginning of the current year.
MUSIC)
XINHE: In today’s fast-paced and highly competitive global market, understanding consumers is more critical than ever. This is particularly true in China, where the consumer landscape is both dynamic and complex.
MARIANN: To navigate this market, brands must understand the unique preferences, purchasing habits and cultural nuances that shape Chinese consumer behaviour.
XINHE: Join us on 9th July online or in person in Beijing to hear experts’ insights on consumer behaviour trends both globally and within the Chinese market and to learn how these trends shaped the recent 6.18 shopping festival in China. This event is exclusively open to European Chamber members. If you are not a member yet, but would like to benefit from our services, please follow the link in the shownotes for details on how to join.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.