China's industrial profits grew 18.7% in the first half of 2026, driven by a massive surge in artificial intelligence demand.
China's industrial profits grew 18.7% in the first half of 2026, reaching 4 trillion yuan. This growth was primarily fueled by an artificial intelligence-fueled boom in chip and equipment manufacturing, which generated massive demand for computing power. Yu Weining, chief statistician of the National Bureau of Statistics department overseeing industrial statistics, noted that the electronics industry also served as a key driver of this rapid growth. The data marks a stark contrast to the first half of 2025, when industrial profits dropped by 1.8% and electronics profits grew by only 3.5%. While June profits rose 15.1% year-on-year, the pace of growth began to slow for a second consecutive month. Economists suggest that while exports remain resilient, domestic demand lags. Investors now look to the Communist Party's Politburo meeting in late July to see how the leaders will set policy direction for the rest of the year.