AI, new-energy demand drive China’s industrial profit growth
Wire desk byline Sourced from Xinhua, Dawn, Arab News, Anadolu and Minute Mirror. Translated and abridged by the GSRRA Desk.
China’s major industrial firms posted accelerated profit growth in the first five months of 2026, driven by surging demand for AI-related electronics and new-energy materials, official data showed Saturday.
Industrial firms with an annual main business revenue of at least 20 million yuan (about 2.93 million U.S. dollars) saw their combined profits reach 3.14 trillion yuan in the January-May period, up 18.8 percent year on year, according to the National Bureau of Statistics (NBS).
The growth surpassed the 18.2 percent rise in the first four months. In May alone, industrial profits rose 21.1 percent, the NBS data showed.
Industrial revenue grew 5.5 percent year on year in the first five months, up 0.3 percentage points from the January-April period, as industrial production remained robust and producer prices continued to rise, said NBS statistician Yu Weining.
Equipment manufacturing remained a key driver. Profits in the sector climbed 14.1 percent during the period, contributing 5.2 percentage points to overall industrial profit growth.
Within this sector, the electronics industry posted a 103.9 percent profit surge, contributing 43.1 percent to overall industrial profit growth, as the global AI boom fueled an explosion in demand for high-end computing and memory products.
Raw materials manufacturing also posted robust gains, with profits surging 83.1 percent and contributing 10.2 percentage points to overall industrial profit growth.
Driven by rising demand from the new-energy and AI industries, copper and aluminum prices remained elevated, pushing profits in the non-ferrous metals sector up 117.1 percent. The petroleum processing industry returned to profitability, while the chemical sector saw profits rise 71.6 percent.
High-tech manufacturing maintained double-digit profit growth, rising 44.7 percent and contributing 8.0 percentage points to overall industrial profit growth, the data showed.
Within this sector, optoelectronic device manufacturing and discrete device manufacturing saw profits rise 53.8 percent and 40.6 percent, respectively, while electronic specialty materials manufacturing surged 665.4 percent.
Corporate cost burdens continued to ease. For every 100 yuan of operating revenue, industrial firms incurred 84.95 yuan in costs in the January-May period, down 0.59 yuan year on year, marking the fifth consecutive month of decline.
The operating profit margin stood at 5.56 percent, up 0.63 percentage points from a year earlier and the highest level among all cumulative periods since 2024, Yu noted.
“Looking ahead, the authorities will make full use of macro policies, strengthen both counter-cyclical and cross-cyclical adjustments, continue to expand domestic demand, optimize supply, and foster new drivers of growth to promote high-quality industrial development,” the statistician said.
Reference Link:- https://english.news.cn/20260627/f7a538aca91946fea4eaebf5e50d03cd/c.html
Zamir Ahmed Awan is the founder and Chair of the Global Silk Route Research Alliance, a think tank in Islamabad. He studied engineering at Shanghai University in the 1980s, and years later he went back to China as Pakistan's science counsellor in Beijing, from 2010 until 2016, working on science and higher education cooperation between the two countries.…
