Profits at industrial companies in China have risen due to the impact of artificial intelligence

A notable piece of economic news: In the first quarter of the year, the profits of industrial companies fell by a total of 15.5%. Excluding the post-pandemic recovery in 2021, this marks the best start to a year since 2017. Yu Weining, an official from the National Bureau of Statistics, explained that the primary driver of this growth was equipment and high-tech manufacturing.

Profits in this sector reached a remarkable 47.4% in the first month of the year. Profits for optical fiber manufacturers increased by 336.8% year-over-year. During the same period, optoelectronic and display device manufacturers also saw growth of 43% and 36.3%, respectively.

Economic Details

Global interest in smart products served as a driving force for the profits of industrial companies in sectors such as drones and consumer electronics. While drone manufacturers’ profits rose by 53.8%, other smart device manufacturers achieved a 67.3% profit increase. Profits for raw material producers surged by 77.9% in the first quarter, driven by the return to profitability of oil refineries.

Strategic sectors such as aviation and new energy technologies drove a 116.7% increase in profits in the non-ferrous metals sector. Sector profitability had seen a limited increase of 0.6% in 2025 following years of decline. This improvement indicated that industrial companies’ profit data was supported by strong export figures.

Brent crude oil prices rose by approximately 48% amid tensions in the Middle East that began in late February. Rising energy costs began to put pressure on the margins of chemical and plastic manufacturers that import raw materials. The Trump administration’s sanctions decisions threatened energy supplies of strategic importance to industrial companies’ profits.

Analysts' Views

The U.S. administration decided to impose sanctions on an independent Chinese refinery purchasing oil from Iran. Producer prices moved upward in March for the first time in a year, driven by rising oil costs. This was interpreted as a sign that the prolonged deflationary pressure in the economy had been broken.

While March data confirmed a technology-driven recovery in manufacturing, the impact of the global energy crisis on costs will shape the industry’s long-term outlook.

Financial markets are closely monitoring this development. Investors are assessing the potential impacts.