This episode contains segments on:

• China’s January Purchasing Managers’ Index (PMI);
• 2025’s industrial profits;
• 2025’s inbound foreign direct investment; and
• British Prime Minister Keir Starmer’s visit to China.

The January/February issue of EURObiz is available to download from the Chamber’s website here.

Contact:

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Read more:

China PMI Performance in January 2026

https://www.stats.gov.cn/sj/zxfb/202601/t20260131_1962416.html

China Industrial Profits January-December 2025

https://www.stats.gov.cn/sj/zxfb/202601/t20260127_1962382.html

China Inbound FDI January-December 2025

https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2026/art_e903fdb8a51742269e6d83adfc7e7e66.html

British Prime Minister Keir Starmer visits China

https://www.gov.cn/lianbo/202601/content_7056654.htm

Transcript:

RUI: Hello and welcome to China ShortCuts,

XINHE: the European Chamber’s weekly catch-up on China’s business landscape.

RUI: This episode was recorded on 4th February 2026.

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RUI: Data released by the National Bureau of Statistics showed that China’s official manufacturing purchasing managers’ index—or PMI—entered contraction territory in January 2026. The non-manufacturing PMI, which includes services and construction, fell to a 37-month low in January.

XINHE: The official manufacturing PMI declined to 49.3, down 0.8 points from December 2025. This downturn was driven in part by a contraction in new orders as well as softer demand from abroad. Larger firms fared better in January, with their respective PMI declining only slightly to 50.3, above the critical threshold of 50 that marks expansion. The PMI for small and medium-sized enterprises remained in contraction territory.

A positive reflection of the Chinese authorities’ efforts to combat deflationary pressures, the PMI for factory gate prices rose to a 28-month high indicating moderate price increases. This rise was in part driven by a surge in prices for some input raw materials. China’s economy has been struggling with factory gate deflation caused by combination of unhealthy competition and weak domestic demand.

China’s non-manufacturing PMI fell to 49.4 in January 2026, the lowest level in 37 months. This was mainly the result of a sharp contraction in construction activity, which fell by four points amid steep declines in new construction orders. The PMI for the service industry also fell slightly in January, remaining in contraction territory for a third consecutive month.

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RUI: In 2025, profits of industrial firms above the designated size increased by 0.6 per cent year-on-year to CNY 739.8 trillion, marking the first annual increase since 2021.

XINHE: Profits in the manufacturing and utility sectors, which make up majority of total industrial profits, grew by five per cent and 9.4 per cent year-on-year respectively. Mining industry profits fell by 26.2 per cent amid a prolonged commodity slump.

Several sectors managed to reverse profit declines amid efforts by Chinese authorities to rein in price wars. Notably, the automotive industry achieved a 0.6 per cent year-on-year profit increase in 2025.

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RUI: Data released by the Ministry of Commerce on 23rd January showed that China’s inbound foreign direct investment—or FDI—totalled CNY 748 billion in 2025, a decrease of 9.5 per cent year-on-year.

XINHE: The distribution of inbound FDI continues to shift toward the service sector, which received 72.9 per cent of all investments, up from 70.7 per cent in 2024. The share of investments into the manufacturing sector, which fuelled China’s early growth, declined to 24.8 per cent of total inbound FDI in 2025.

High-tech industries received a third of inbound investment, with FDI into the e-commerce services and medical devices and equipment industries jumping 75 per cent and 42.1 per cent respectively.

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RUI: British Prime Minister Keir Starmer met with Chinese President Xi Jinping as part of a four-day visit to China taking place between 28th January and 31st January.

XINHE: Starmer’s visit is the first by a British prime minister since Theresa May travelled to Beijing in 2018. During the state visit, China announced 30-day visa-free access for British citizens and the removal of Chinese tariffs on whisky imported from the United Kingdom. 

Starmer joined a growing list of heads of state, including Canadian Prime Minister Mark Carney and French President Emmanuel Macron, who have visited China in recent months. German Chancellor Friedrich Merz is scheduled to visit in late February.

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RUI: The 90th issue of the Chamber’s bimonthly EUROBiz Magazine focuses on emerging opportunities in China’s night-time economy.

XINHE: The issue also contains articles dissecting how companies can navigate China’s rapidly shifting artificial intelligence landscape as well as an executive summary of the Chamber’s Shanghai Position Paper 2025/2026.

RUI: Download the latest issue from the Chamber’s website for free to learn more.

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XINHE: Thanks for listening, and don’t forget to tune in next week.

RUI: In the meantime, please find useful links in the episode notes.