High-tech manufacturing is becoming an increasingly important driver of China's economy, with companies in the electronics, semiconductor and artificial intelligence sectors reporting significantly better results than traditional industrial enterprises. This is shown by the latest economic data and analyses cited by Reuters.
China's economy grew by 4.5% year-on-year in the third quarter of 2026, compared to 4.3% in the previous one. Strong exports and industrial production are the main contributors to the acceleration, while domestic consumption remains relatively weak.
The gap between high-tech and traditional industries is particularly pronounced. Computer and electronics makers are seeing profits rise on global demand for artificial intelligence and government support for technological independence. At the same time, companies in sectors such as furniture manufacturing are facing falling profits and rising costs.
China's semiconductor makers are benefiting from rising prices for technology components, while domestically-oriented companies continue to struggle due to limited consumption, Reuters reported.
Despite the progress of high-tech industries, overall activity in China's manufacturing sector remains near stagnation. A Reuters poll of 23 economists showed that the official purchasing managers' index (PMI) is expected to fall to 50 points in October from 50.1 points in September. A value of 50 points separates growth from contraction in manufacturing activity.
Chinese authorities continue to direct funding to technology industries and infrastructure, while preparing measures to stimulate domestic demand in the period 2026-2030.
Beijing has also planned to use 550 billion yuan, or approximately $82.5 billion, of unused government debt quotas to support local governments and infrastructure investment.
However, analysts warn that the technological boom has not yet led to a comparable improvement in household income and consumption. Continuing problems in the real estate market are further limiting domestic demand.
Thus, the Chinese economy is increasingly developing at two different speeds – rapid growth in high-tech industries and significantly weaker activity in traditional industry and consumer sectors.