Analysis: China’s AI Boom Masks a Deepening Economic Divide

As artificial intelligence (AI) emerges as a powerful engine for China’s exports and industrial profits, economists warn that the boom could exacerbate deep-seated structural inequalities.

On the surface, the AI boom is providing a much-needed lifeline to China’s industrial sector. Driven by a surge in global demand for computing power, China saw its dollar-denominated exports rise by 19.4% in May 2026. This increase has fueled a recovery in the Producer Price Index (PPI) and delivered triple-digit profit growth for the electronics and semiconductor sectors. The country’s exports expanded further in June, jumping 27%.

In 2025, the scale of China’s core AI industry exceeded 1.2 trillion yuan ($177 billion), and the number of enterprises exceeded 6,200, according to Li Lecheng, Minister of Industry and Information Technology. This rapid growth has also fueled a jump in fixed-asset investment in related fields.