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China’s tech push fuels fastest profit growth in 4 years amid signs of economic divide
AI demand and local chip substitution spark boom for tech firms, leaving traditional industries far behind
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Zhang Shidongin Shanghai
Artificial intelligence demand and technological domestic substitution drove profit growth for Chinese listed companies to its fastest pace in four years in the first half of 2026, underscoring the nation’s “K-shaped” economic structure as it transitions away from credit-fuelled expansion.
Profit for firms on the chip-heavy Star Market under the Shanghai Stock Exchange surged more than fourfold from a year earlier in the six months to June, while those on the similarly structured ChiNext board in Shenzhen rose 33 per cent, according to a report by the China Association for Public Companies.
That outpaced the 19.5 per cent increase for all 5,557 mainland China-listed companies, marking the fastest growth since 2022. The interim earnings season wrapped up on Tuesday.
The disparity reflects Beijing’s push for technological self-reliance after policymakers set the goal of prioritising the tech industry in the AI race against the US.
China’s big tech platforms are accelerating AI adoption by using home-made chips to support computing power, while memory chipmaker ChangXin Memory Technologies (CXMT) and other AI hardware companies have boosted capacity after tapping capital markets.
“Technology and high-end manufacturing are becoming the new engines of economic growth in China,” said Zhang Qiyao, analyst at Industrial Securities.
About one-fifth of listed companies unveiled buy-back plans worth more than 200 billion yuan (US$29.8 billion) by the end of August, the report said.
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