AI emerges as a new driver of China's industrial growth
Artificial intelligence is increasingly moving beyond the digital sphere to become a factor shaping industrial development, energy demand and infrastructure. China's latest statistics show that demand for computing power and advanced electronic components is already influencing the financial performance of entire industries. Yet behind the overall growth lies a more complex picture: high-tech manufacturing is expanding faster than many traditional sectors.
From January to September 2026, the combined profits of China's major industrial firms increased by 15.5 percent year on year to 6.03 trillion yuan. In September alone, profits rose by 14.4 percent compared with the same month a year earlier, accelerating from August.
The electronics industry was a major source of growth. Its profits doubled during the first nine months of the year. According to CCTV+, strong demand for AI computing power and advanced memory technologies played an important role. Profits at manufacturers of specialized electronic materials surged by 220 percent, while those of discrete semiconductor device manufacturers increased by 51.7 percent.
High-tech manufacturing as a whole recorded even stronger growth, with profits rising 52 percent year on year. The expansion of computing infrastructure and data centers also supported related industries, including optical fiber, optical cable and computer equipment manufacturing. The impact of AI therefore extends well beyond companies developing software models: it reaches suppliers of components, equipment and materials.
This trend reflects an important economic mechanism. Developing AI requires not only algorithms and software, but also powerful servers, semiconductors, data storage systems, networking equipment and substantial amounts of electricity. Investment in digital technologies consequently creates additional demand for industrial products. For an economy with a large manufacturing base, this connection offers an opportunity to turn technological demand into higher industrial output and profits.
However, rapid growth in selected industries does not mean that the industrial recovery is evenly distributed. According to Reuters, profits in computer, communications and other electronic equipment manufacturing more than doubled over the first nine months of the year, while furniture manufacturing profits fell by more than half. The figures illustrate how the benefits of the technology boom are being distributed unevenly across sectors.
Questions also remain about the long-term sustainability of this growth. A significant share of current demand is linked to investment in AI infrastructure. If investment slows, manufacturers of equipment and components could face weaker orders. Corporate profitability is also affected by domestic demand, production costs, competition and international trade conditions. High-tech performance therefore needs to be considered in the context of the wider economy rather than in isolation.
Nevertheless, China's results show how technological change can reshape an industrial structure. AI development is stimulating demand for higher-value products and increasing the importance of electronics, semiconductors and computing infrastructure. The key question is no longer only how quickly emerging industries are growing, but whether they can help improve productivity and profitability across a broader range of businesses.
According to CCTV+, profits at China's major industrial firms rose 15.5 percent in the first nine months of 2026, while profits in high-tech manufacturing increased by 52 percent. These figures point to the growing role of technology-related industries in China's industrial economy. The sustainability of this trend, however, will depend on how widely the benefits of AI investment spread across other sectors and whether demand remains resilient in both domestic and international markets.
