BEIJING: China’s drive to translate technological innovation into economic growth is gaining traction on factory floors and corporate balance sheets, as profits at major industrial firms rose 15.5 percent year-on-year in the first nine months of 2026. This increase was fueled by strong earnings in artificial intelligence (AI)-related industries and high-tech manufacturing, despite global economic uncertainties.
Industrial firms with annual main business revenue of at least 20 million yuan ($2.8 million) recorded combined profits of 6.03 trillion yuan from January to September, according to data released by the National Bureau of Statistics (NBS) on Tuesday. Profit growth jumped to 14.4 percent year-on-year in September, up from 4.2 percent in August.
These gains came as China stepped up efforts to support growth, cultivate new quality productive forces, and upgrade its industrial sector amid persistent global trade and economic uncertainties.
Industrial production has remained steady, with cumulative profit growth staying in double digits so far this year, reflecting continued progress in the high-quality development of the industrial economy, Yu Weining, chief statistician of the Industrial Statistics Department of the NBS, said in a statement on Tuesday.
Chinese economists noted that the strong earnings indicated a more self-sustaining industrial growth model, as technological advances generate profits that fuel further investment and expansion. They expect the momentum to carry into the fourth quarter, backed by continued innovation, wider industrial applications and potential policy support.
The electronics industry emerged as a key driver of industrial profit growth, as technological iteration and industrial upgrading continued to improve its performance. Profits in the sector doubled year-on-year in the first nine months, contributing 9.6 percentage points to the overall 15.5 percent increase, according to the NBS.
Strong demand for AI computing power and advanced memory technologies pushed profits in electronic specialty materials manufacturing up 220 percent, while those in semiconductor discrete device manufacturing rose 51.7 percent. Profits in optoelectronic component and electronic circuit manufacturing both climbed more than 60 percent, driven by the rapid development of next-generation information technology.
High-tech manufacturing also posted strong gains, with profits surging 52 percent year-on-year, 36.5 percentage points above the overall industrial growth rate. The sector’s share of total industrial profits reached 25.5 percent, up 6.2 percentage points from a year earlier.
Meanwhile, expanding computing power and data center construction helped boost profits in optical fiber manufacturing by 570 percent and optical cable manufacturing by 110 percent.
Tian Yun, a Beijing-based veteran economist, noted that China’s double-digit industrial profit growth was particularly impressive given the sheer scale of its manufacturing sector. He attributed the strong performance increasingly to R&D investment and technological innovation, marking a shift away from the traditional reliance on production scale and cost advantages.
“Innovation is spreading beyond industry giants to smaller component manufacturers and advanced materials producers, strengthening China’s broader manufacturing ecosystem,” Tian told the Global Times on Tuesday.
The latest earnings figures signal a profound shift: Emerging industries are developing a more sustainable and market-driven growth model, Hu Qimu, a professor at the Maritime Silk Road Institute of Huaqiao University, told the Global Times.
Earlier NBS data showed that investment in high-tech manufacturing rose 4 percent year-on-year in the first three quarters, while the sector’s value-added output grew 14.3 percent, well above the 5.3 percent increase in overall industrial production.
Hu said the strong profitability is further evidence that these investments and production gains are yielding tangible commercial returns. “The resulting earnings give companies more resources to fund R&D and expand operations, helping create a self-reinforcing cycle of innovation, profitability and reinvestment.”
New growth drivers are playing an increasingly prominent role in China’s industrial expansion. Led by high-tech and digital product manufacturing, they accounted for over 20 percent of value-added output at major industrial firms but contributed more than half of overall industrial growth in the first three quarters, official data showed. Their contribution topped 60 percent in the third quarter alone. –The Daily Mail-Global Times news exchange item
