🇨🇳 China Firms Lag, Power Aids AI

Natixis said Chinese corporate profitability remained below global peers in the first half of 2026, with margins at 4.5% versus nearly 9% globally and returns on capital at 6% versus above 11%. Based on a comparison of 2,300 Chinese firms and 9,000 overseas counterparts, the bank said China is still positioned to benefit from the AI boom because of ample power capacity, as Natixis reported.

The survey pointed to a structural divide inside China's corporate sector: central SOEs had lower and faster-falling interest burdens than private firms, at 2.2% versus 3.2%, while private firms remained more profitable. Natixis said weak revenue generation and lower capital returns continue to weigh on companies, even as debt burdens have eased.

On AI infrastructure, Natixis estimated AI data centres would account for only about 5% of China’s annual increase in power consumption, versus 48% in the US, 28% in Europe, and 66% in Japan. That gives China greater room to expand data-centre capacity without crowding out other sectors.

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