Artificial Intelligence Boosts Profit Growth for Industrial Companies in China

In the first five months of 2026, major industrial companies in China experienced a remarkable growth in profits, rising by 18.8%. This growth is largely attributed to the increasing demand for electronics related to artificial intelligence and renewable energy materials. According to data reported by Xinhua News Agency from the National Bureau of Statistics of China, the total profits of industrial companies with annual revenues of at least 20 million yuan (approximately 2.94 million USD) reached 3.14 trillion yuan (around 460 billion USD) during the period from January to May, marking an increase of 18.8% year-on-year. This growth rate represents an acceleration compared to the 18.2% growth recorded in the first four months of the year, with industrial profits in May alone increasing by 21.1%. The statistician at the National Bureau of Statistics, Yui Wei Ning, noted that industrial revenues rose by 5.5% year-on-year during the first five months, an increase of 0.3 percentage points compared to the period from January to April, thanks to the sustained strength of industrial production and rising producer prices. The machinery manufacturing sector remained the main driver of growth, with profits rising by 14.1%, contributing 5.2 percentage points to the total growth of industrial profits. The electronics industry performed exceptionally well, with profits soaring by 103.9%, contributing 43.1% to the total growth of industrial profits, driven by the global boom in artificial intelligence and the significant increase in demand for advanced computing and memory products. Additionally, the high-tech manufacturing sector saw profits increase by 44.7%, contributing 8 percentage points to the growth of industrial profits. The raw materials manufacturing sector also achieved strong gains, with profits rising by 83.1%, contributing 10.2 percentage points to industrial profit growth. The increasing demand from the renewable energy and artificial intelligence sectors kept copper and aluminum prices high, leading to a 117.1% increase in profits for the non-ferrous metals sector. The oil processing industry returned to profitability, while profits in the chemicals sector rose by 71.6%. Overall, the data indicates a continued decline in cost burdens on companies, with the operating profit margin reaching 5.56%, up 0.63 percentage points from the previous year, marking the highest level among all cumulative periods since 2024.