China’s Industrial Production YoY growth for November 2025 came in at 4.90%, significantly below the 5.50% consensus estimate and a sharp slowdown from October’s 6.50% reading. According to the Sigmanomics database, this is the lowest growth rate since early 2024, reflecting a cooling manufacturing sector amid a complex macroeconomic backdrop.

Drivers this month

• Manufacturing output growth slowed due to weaker export orders and subdued domestic demand.
• Energy-intensive industries contracted slightly, pressured by rising input costs and environmental regulations.
• Automotive and electronics sectors showed mixed results, with supply chain disruptions persisting.

Policy pulse

The current reading sits below the People’s Bank of China’s implicit growth targets, complicating monetary policy decisions. While inflation remains moderate, the slowdown in industrial output limits room for aggressive rate hikes or tightening.

Market lens

Immediate reaction: The Chinese yuan (CNYUSD) weakened by 0.30% in the first hour post-release, while 2-year government bond yields edged down 5 basis points, reflecting increased growth concerns.

Industrial Production is a core macroeconomic indicator reflecting the health of China’s manufacturing and mining sectors. The 4.90% YoY growth in November 2025 contrasts with the 12-month average of approximately 5.70% since late 2024, signaling a deceleration trend. This slowdown coincides with softer PMI readings and a dip in fixed asset investment growth.

Monetary Policy & Financial Conditions

The People’s Bank of China has maintained a cautious stance, balancing growth support with financial stability. Recent tightening in credit conditions and higher real interest rates have contributed to subdued industrial activity. Liquidity injections remain targeted, with no broad-based easing expected in the near term.

Fiscal Policy & Government Budget

Fiscal stimulus has been selectively deployed, focusing on infrastructure and technology upgrades. However, local government debt constraints and a cautious central budget limit the scale of expansionary measures. The government’s emphasis on “quality growth” over volume may temper aggressive fiscal spending.

External Shocks & Geopolitical Risks

Trade tensions and geopolitical frictions continue to weigh on export-oriented industries. Tariff uncertainties and supply chain realignments have dampened foreign demand. Additionally, global commodity price volatility impacts input costs for energy and raw materials.

Drivers this month

• Export-oriented heavy industries contracted by 1.20% MoM, reflecting global demand softness.
• Energy sector output declined 0.50% YoY due to environmental restrictions and higher coal prices.
• Consumer goods manufacturing remained stable but showed no growth acceleration.

Policy pulse

Monetary policy remains accommodative but cautious. The PBOC’s reluctance to cut rates aggressively reflects concerns about financial stability and inflation. Fiscal policy may need to play a larger role to offset industrial weakness.

Market lens

Immediate reaction: The Shanghai Composite Index (red SHCOMP) fell 0.80% post-release, while the USD/CNH pair rose 0.30%, indicating risk-off sentiment and growth concerns.

Looking ahead, China’s industrial production trajectory faces multiple scenarios shaped by domestic and external factors. The Sigmanomics database and recent trends suggest three main outlooks:

Bullish scenario (25% probability)

• Global demand rebounds sharply in H1 2026, boosting exports.
• Targeted fiscal stimulus and infrastructure investment accelerate industrial activity.
• Supply chain normalization reduces costs and improves output efficiency.
• Industrial Production YoY growth rebounds to 6.50%-7% by mid-2026.

Base scenario (50% probability)

• Moderate global growth with steady but unspectacular export demand.
• Fiscal policy remains supportive but constrained; monetary policy steady.
• Industrial Production growth stabilizes around 5%-5.50% YoY in early 2026.

Bearish scenario (25% probability)

• Geopolitical tensions escalate, disrupting trade and investment.
• Domestic credit tightening intensifies, slowing manufacturing further.
• Industrial Production growth falls below 4% YoY, risking broader economic slowdown.

Structural & Long-Run Trends

China’s industrial sector is undergoing structural shifts toward higher value-added manufacturing and green technologies. While short-term volatility persists, long-run trends favor modernization and automation. The government’s “dual circulation” strategy aims to reduce export dependence and boost domestic consumption, which may gradually stabilize industrial output growth.

The November 2025 Industrial Production YoY data highlights a clear slowdown in China’s manufacturing growth. This deceleration reflects a confluence of tighter financial conditions, subdued external demand, and ongoing structural adjustments. Policymakers face a delicate balancing act between supporting growth and maintaining financial stability. Market participants should watch for fiscal policy signals and global trade developments closely.

While risks remain tilted to the downside, the potential for targeted stimulus and gradual global recovery offers a path to stabilization. Investors and analysts must consider both cyclical and structural factors when assessing China’s industrial outlook in the coming quarters.

Key Markets Likely to React to Industrial Production YoY

China’s Industrial Production YoY data significantly influences equity, currency, and commodity markets. The manufacturing sector’s health affects global supply chains and trade flows, making related assets sensitive to these releases. Below are five tradable symbols historically correlated with China’s industrial output trends:

• SHCOMP – Shanghai Composite Index, reflecting Chinese industrial and economic activity.
• USDCNH – USD vs. Chinese yuan offshore, sensitive to growth and policy shifts.
• BAIC – Beijing Automotive Industry Holding Co., linked to manufacturing output.
• BTCUSD – Bitcoin, often reacting to macro risk sentiment including China’s economic data.
• EURCNH – Euro vs. Chinese yuan offshore, reflecting trade and capital flow dynamics.

Insight: Industrial Production YoY vs. SHCOMP Index Since 2020

Since 2020, China’s Industrial Production YoY growth and the Shanghai Composite Index (SHCOMP) have shown a positive correlation, particularly during recovery phases post-pandemic. Periods of industrial acceleration, such as mid-2021 and early 2023, coincided with strong equity rallies. Conversely, industrial slowdowns, including the recent November 2025 dip to 4.90%, have led to equity market pullbacks. This relationship underscores the SHCOMP’s sensitivity to manufacturing sector health and broader economic momentum.

FAQs

What does China’s Industrial Production YoY indicate?

China’s Industrial Production YoY measures the annual growth rate of output from manufacturing, mining, and utilities, reflecting economic health and industrial activity.

How does the November 2025 reading compare historically?

The 4.90% growth is the slowest since early 2024 and below the 12-month average of 5.70%, signaling a notable slowdown in industrial momentum.

What are the macro implications of this slowdown?

The slowdown suggests weaker domestic demand and export challenges, pressuring growth forecasts and influencing monetary and fiscal policy decisions.

Takeaway: China’s November 2025 Industrial Production YoY slowdown to 4.90% highlights emerging growth headwinds, necessitating calibrated policy support amid external uncertainties.

Author: Sigmanomics Editorial Team

Updated 11/14/25

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.