Artificial intelligence is projected to contribute between 0.3 and 0.5 percentage points to China's annual GDP growth rate in 2025 and 2026.
In the current development phase, AI's contribution to China's economic expansion extends beyond simple capital investment. It is realized through multiple channels: the direct growth of related industries, the stimulation of upstream and downstream sectors, and the fulfillment of external demand through exports. According to our calculations, AI is expected to add approximately 0.3 to 0.5 percentage points to China's GDP growth in 2025 and 2026.
Key Drivers of AI's Economic Impact
First, since the beginning of 2025, Chinese technology companies have significantly increased their investment in AI development and have been revising their future AI investment expectations upwards. This trend suggests that AI investment in China is poised for sustained, rapid growth in the coming years.
A detailed look at listed company data reveals that capital expenditures by firms in AI-related sectors have accelerated notably since 2025, far outpacing those in non-AI sectors. The year-on-year growth rate for capital spending in AI-related listed companies reached 9.3% in 2025, a 16.3 percentage point increase from 2024. This growth further accelerated to 11.1% in the first quarter of this year, indicating a continued upward trajectory.
Second, a more significant role of AI in economic growth lies in its comprehensive empowerment of traditional industries. On the production side, the integration of AI with products from conventional fields has spurred new consumer demand associated with emerging business models. With the maturation of large model lightweighting technology and the enhancement of edge computing capabilities, new smart terminals like AI phones, AI computers, and AI glasses are rapidly gaining popularity. According to forecasts from internet data centers, empowered by AI devices, the compound annual growth rates for China's PC, tablet, and smartphone shipments are projected to return to positive territory at 2.6%, 1%, and 1.3%, respectively, from 2026 to 2030.
Third, the surge in global demand for AI-related products, driven by worldwide AI investment expansion, has further highlighted China's export competitive advantages. The boost in AI-related demand has consistently exceeded market expectations in its impact on global demand. As a key global production and supply hub for the entire AI industry chain, China's export competitiveness has become more pronounced. In the first four months of this year, China's exports of products with high AI relevance totaled 1,534.58 billion yuan, surging 36.9% year-on-year. These exports contributed a substantial 43.6% to China's total export growth during this period, underscoring that AI-related products have become a core driver of China's export expansion.
Methodology for Calculating AI's GDP Contribution
Regarding the measurement of AI's contribution to GDP, some institutions assessing the U.S. economy consider two dimensions: the contribution of AI-related investment to GDP growth and the contribution of AI-related imports to GDP growth. Thus, the formula is: AI's contribution to GDP growth rate = AI investment contribution rate + AI import contribution rate.
Using this methodology, AI is estimated to have contributed approximately 0.3 percentage points to China's GDP in 2025. As of April this year, the cumulative contribution of AI to China's GDP for the year stands at about 0.1 percentage points, with the full-year contribution still expected to remain around 0.3 percentage points.
Our analysis is based on China's 2023 input-output table to calculate the economic growth multiplier effect of AI-related industries. Combining this with the scale data of China's AI industry in 2024 and 2025, we further estimate AI's contribution to economic growth.
From an input-output perspective, our calculations show that AI-related industries have an overall economic growth multiplier of 2.07. This corresponds to an estimated contribution of about 0.4 percentage points to China's GDP in 2025. Assuming China's core AI industry maintains a high growth rate of 20% to 30% in 2026, AI's contribution to GDP that year is projected to be between 0.4 and 0.5 percentage points.
According to estimates from some overseas institutions, AI's near-term impact on economic growth may be relatively modest, but it is expected to provide substantial support to China's economy over the medium to long term. The contribution is projected to be around 0.2 to 0.3 percentage points in 2026-2027, and by 2035, it could potentially boost the underlying GDP growth rate by 3.5 percentage points compared to a scenario without AI.
A Comparative Analysis: China vs. the United States
Comparing the contributions of AI to economic growth in China and the United States reveals distinct differences. In 2025-2026, AI's contribution to China's GDP is estimated to be less than 10%, while its contribution to U.S. GDP during the same period reaches 15% to 20%. We believe this disparity is primarily influenced by the following two factors.
On one hand, there is a divergence in strategic objectives. Under initiatives like the "Stargate" project, the U.S. emphasizes the large-scale stacking and expansion of AI computing power. In contrast, China follows a differentiated path prioritizing "computing efficiency," focusing more on reducing AI training costs and improving operational efficiency. Under these different strategies, China's short-term AI-related capital expenditure scale is significantly lower than that of the U.S., which is reflected in the data showing a stronger AI-driven economic boost for the U.S. However, from a medium- to long-term perspective, AI's contribution to China's economic growth is expected to become more prominent as efficiency improves and applications are gradually rolled out. Meanwhile, the U.S. may need to be concerned about the risk of a bubble burst due to potential overinvestment.
On the other hand, as U.S. AI investment was primarily software-focused before 2025, with hardware investment expansion beginning thereafter, its impact on China's exports is still in its early stages. The positive effect on China's GDP growth from this dynamic only started to become apparent in the second half of 2025, leading to a potential underestimation of its full-year impact. Furthermore, looking at the trend, as China makes breakthroughs in domestic chip substitution across mature processes, memory, and advanced packaging, the trade deficit in AI-related products is expected to narrow. This development will further enhance AI's contribution to China's GDP growth in the medium to long term.
Comments