China's industrial profits plunge 9.1% in May, signaling persistent deflation worries

China's industrial profits plunged 9.1% in May from a year earlier in the latest sign that Beijing's stimulus efforts are falling short on boosting enterprises' profitability.

Cumulative profits at major industrial firms fell 1.1% this year as of May, compared to a year earlier, the data showed.

Citi Bank earlier this week upgraded China's growth forecast for 2025 to 5% from 4.7%, in line with Beijing's official target, boosted by robust growth in the first half of the year and expectations for resilient exports.

China's exports this year have held up in spite of the erratic U.S. tariff policy, thanks to a surge in shipments to Southeast Asia and the European Union countries. In May, the country's exports rose 4.8% from a year earlier, even as the U.S.-bound shipment plunged 34.5% from a year ago.

Citi expects the country's overall exports to grow a decent 2.3%, while factoring in an estimated 10% decline in shipments to the U.S.

U.S. President Donald Trump said Wednesday that a deal with China had been signed, without providing additional details. A White House official later clarified that "the administration and China agreed to an additional understanding of a framework to implement the Geneva agreement."

The Geneva deal had faltered over China's curbs on critical mineral exports and the U.S. tightening restrictions on tech and Chinese student visas.

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