China’s tech push fuels fastest profit growth in 4 years amid signs of economic divide
Chinese listed companies experienced their fastest profit growth in four years during the first half of 2026, driven largely by the artificial intelligence sector and domestic hardware substitution. This growth highlights a 'K-shaped' economic recovery where high-tech industries thrive while other sectors lag.
Why it matters
It signals the success of China's state-led push for technological self-reliance and provides insight into the shifting engines of the world's second-largest economy.
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.
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