China Industrial Profits Rise 17.6% Driven by AI Demand

Profits for industrial firms above designated size in China rose 17.6% year on year during the first seven months of 2026, totaling 4.58 trillion yuan. According to data from the National Bureau of Statistics, the growth was primarily driven by the AI Plus initiative and increased demand for computing power.

The computer, communications, and electronic equipment manufacturing sector experienced the most significant surge, with profits jumping 110%. High-tech and raw material manufacturing also reported strong growth. In contrast, the power, heat, gas, and water production sector saw a 5.8% decline.

Yu Weining, a statistician at the National Bureau of Statistics, attributed the gains to AI integration but warned of a complex international environment and a domestic imbalance between strong supply and weak demand. Pang Ming of the China Chief Economist Forum stated that the growth reflects the development of new quality productive forces, noting that innovation-driven forces are currently offsetting pressure on traditional industries.