Industrial Profits Surge, AI Drives Import Boom; Economists Reassess China's Outlook
China's industrial enterprise profits saw their fastest growth in six months in March, driven by AI-related R&D and investment. Economists have significantly raised China's import growth forecasts, expecting it to outpace exports, signaling a structural shift towards industrial upgrading rather than domestic consumption.
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- 📰 Published: April 27, 2026 at 12:23
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- 🤖 AI Analyzed: April 28, 2026 at 02:44 (14h 12m after Collected)
Central News Agency
(Central News Agency, Beijing 27th, comprehensive foreign wire report) Despite the Iran war disrupting global oil markets and pushing up raw material costs, China's industrial enterprise profits still achieved their fastest growth in six months in March. Furthermore, due to research and development and investment in artificial intelligence (AI), economists have significantly raised their forecasts for China's import growth.
U.S. financial news network CNBC reported today that data released by China's National Bureau of Statistics showed that profits of industrial enterprises above designated size nationwide increased by 15.8% in March this year, the fastest growth since September last year, and higher than the 15.2% increase in the first two months of this year.
In the first quarter of this year, profits of industrial enterprises above designated size grew by 15.5%. Excluding the high base growth affected by the pandemic in 2021, 2026 marks the best first-quarter performance for industrial enterprise profits since 2017.
Yu Weining, Chief Statistician of the Industrial Department of the National Bureau of Statistics, stated that the acceleration of overall profit growth was mainly driven by equipment manufacturing and high-tech manufacturing, with these two industries seeing profit increases of 21% and 47.4% respectively in the first quarter.
Demand for smart products also boosted profits in emerging industries. Drone manufacturers' profits increased by 53.8%, while other smart consumer device manufacturers saw a 67.3% increase.
Following industrial profits ending three consecutive years of negative growth and maintaining a positive growth of 0.6% in 2025, industrial enterprise profits have stabilized, driving this rebound.
According to other foreign wire reports, economists have now significantly raised their import forecasts for China, expecting import growth to surpass export growth for the first time since 2021. This will help alleviate the pressure of accumulating trade surpluses, allowing exports to remain near the historical highs set last year without further surging.
According to estimates from 17 economists interviewed by Bloomberg News this month, China's imports are expected to grow by 5% in 2026, the highest in five years, as Chinese companies massively purchase high-end chips needed for AI. This is more than double the forecast from March, ending the previous four years of stagnation or decline.
Export growth forecasts have also been raised from 3.6% to 4.9%. China's merchandise trade surplus is expected to be slightly above US$1.2 trillion, meaning that after two consecutive years of strong growth, the surplus will stabilize, with only a slight increase from 2025 levels.
The influx of Chinese goods into overseas markets since the COVID-19 pandemic has triggered international backlash. In response, the Chinese government has pledged to increase import openness and introduced some incremental policies, such as canceling export tax rebates for products like solar cells. However, the real driver of accelerated import growth is China's reliance on cutting-edge AI-related technologies, as domestic demand is still constrained by weak consumption.
Serena Zhou, Senior China Economist at Mizuho Securities, said, "The government has realized that a huge trade surplus is not a long-term solution."
She personally predicts that China's imports will grow by 7.5% this year, partly due to policy adjustments, but external sales will remain an important engine for economic growth. "So far, I haven't seen a clear recovery in domestic demand."
Amid severe disruptions to global energy supply due to the Iran war, China's trade showed resilience from January to March. Given the much better-than-expected performance, economists hurriedly adjusted some of their forecasts for the Chinese economy.
In the first three months of 2026, China's imports surged by 23% year-on-year, while exports grew by 15%. The unexpected surge in March imports was largely driven by the global AI investment boom, which spurred demand for chips and advanced manufacturing equipment.
In addition to AI, other factors driving China's import expansion include exchange rates. The RMB has appreciated by nearly 7% against the U.S. dollar over the past year, increasing the purchasing power of households and businesses. Rising metal prices also pushed up the import value of copper and aluminum products.
So far, rising global oil prices have not had a significant impact on China's import growth, as March data showed only a slight decrease in China's crude oil imports.
The optimistic outlook for exports also reflects several benefits brought to China by the unexpected Iran war. Surging demand for green energy products is helping Chinese companies, including automakers, further expand into overseas markets; compared to other countries, China's supply chain is more resilient to energy shocks.
Erica Tay, China Economist at Maybank, said, "Compared to many Asian countries, China's economy has proven more resilient to supply shocks related to the Iran war. The increased global demand for electric vehicles and solar panels is even a positive, as Chinese companies dominate these fields."
Some analyses point out that the stagnation in China's import growth over the past few years reflected insufficient domestic consumer confidence and weak domestic demand caused by the real estate crisis. Import growth driven by AI chips and equipment, rather than private consumption, is a 'production-type import' that can pave the way for future industrial upgrading and also signifies China's attempt to shift its economic engine from 'low-cost manufacturing exports' to 'high-tech core.' (Compiler: Chen Yi-wei) 1150427
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(Central News Agency, Beijing 27th, comprehensive foreign wire report) Despite the Iran war disrupting global oil markets and pushing up raw material costs, China's industrial enterprise profits still achieved their fastest growth in six months in March. Furthermore, due to research and development and investment in artificial intelligence (AI), economists have significantly raised their forecasts for China's import growth.
U.S. financial news network CNBC reported today that data released by China's National Bureau of Statistics showed that profits of industrial enterprises above designated size nationwide increased by 15.8% in March this year, the fastest growth since September last year, and higher than the 15.2% increase in the first two months of this year.
In the first quarter of this year, profits of industrial enterprises above designated size grew by 15.5%. Excluding the high base growth affected by the pandemic in 2021, 2026 marks the best first-quarter performance for industrial enterprise profits since 2017.
Yu Weining, Chief Statistician of the Industrial Department of the National Bureau of Statistics, stated that the acceleration of overall profit growth was mainly driven by equipment manufacturing and high-tech manufacturing, with these two industries seeing profit increases of 21% and 47.4% respectively in the first quarter.
Demand for smart products also boosted profits in emerging industries. Drone manufacturers' profits increased by 53.8%, while other smart consumer device manufacturers saw a 67.3% increase.
Following industrial profits ending three consecutive years of negative growth and maintaining a positive growth of 0.6% in 2025, industrial enterprise profits have stabilized, driving this rebound.
According to other foreign wire reports, economists have now significantly raised their import forecasts for China, expecting import growth to surpass export growth for the first time since 2021. This will help alleviate the pressure of accumulating trade surpluses, allowing exports to remain near the historical highs set last year without further surging.
According to estimates from 17 economists interviewed by Bloomberg News this month, China's imports are expected to grow by 5% in 2026, the highest in five years, as Chinese companies massively purchase high-end chips needed for AI. This is more than double the forecast from March, ending the previous four years of stagnation or decline.
Export growth forecasts have also been raised from 3.6% to 4.9%. China's merchandise trade surplus is expected to be slightly above US$1.2 trillion, meaning that after two consecutive years of strong growth, the surplus will stabilize, with only a slight increase from 2025 levels.
The influx of Chinese goods into overseas markets since the COVID-19 pandemic has triggered international backlash. In response, the Chinese government has pledged to increase import openness and introduced some incremental policies, such as canceling export tax rebates for products like solar cells. However, the real driver of accelerated import growth is China's reliance on cutting-edge AI-related technologies, as domestic demand is still constrained by weak consumption.
Serena Zhou, Senior China Economist at Mizuho Securities, said, "The government has realized that a huge trade surplus is not a long-term solution."
She personally predicts that China's imports will grow by 7.5% this year, partly due to policy adjustments, but external sales will remain an important engine for economic growth. "So far, I haven't seen a clear recovery in domestic demand."
Amid severe disruptions to global energy supply due to the Iran war, China's trade showed resilience from January to March. Given the much better-than-expected performance, economists hurriedly adjusted some of their forecasts for the Chinese economy.
In the first three months of 2026, China's imports surged by 23% year-on-year, while exports grew by 15%. The unexpected surge in March imports was largely driven by the global AI investment boom, which spurred demand for chips and advanced manufacturing equipment.
In addition to AI, other factors driving China's import expansion include exchange rates. The RMB has appreciated by nearly 7% against the U.S. dollar over the past year, increasing the purchasing power of households and businesses. Rising metal prices also pushed up the import value of copper and aluminum products.
So far, rising global oil prices have not had a significant impact on China's import growth, as March data showed only a slight decrease in China's crude oil imports.
The optimistic outlook for exports also reflects several benefits brought to China by the unexpected Iran war. Surging demand for green energy products is helping Chinese companies, including automakers, further expand into overseas markets; compared to other countries, China's supply chain is more resilient to energy shocks.
Erica Tay, China Economist at Maybank, said, "Compared to many Asian countries, China's economy has proven more resilient to supply shocks related to the Iran war. The increased global demand for electric vehicles and solar panels is even a positive, as Chinese companies dominate these fields."
Some analyses point out that the stagnation in China's import growth over the past few years reflected insufficient domestic consumer confidence and weak domestic demand caused by the real estate crisis. Import growth driven by AI chips and equipment, rather than private consumption, is a 'production-type import' that can pave the way for future industrial upgrading and also signifies China's attempt to shift its economic engine from 'low-cost manufacturing exports' to 'high-tech core.' (Compiler: Chen Yi-wei) 1150427
Stand with facts, every sponsorship you make is a force to protect press freedom.
Download the CNA 'First-hand News' APP to stay updated with the latest news.
Text, images, and audio/video on this website may not be reproduced, publicly broadcast, or publicly transmitted and used without authorization.