China Says AI Is Boosting Economic Growth as Chip Output and Smart Wearables Surge

Artificial intelligence is becoming an increasingly important driver of China's industrial production, services and consumer markets, according to Chinese officials, with recent data showing rapid growth in integrated circuit output, technology investment and sales of smart devices.

At a press conference on October 19, officials from the National Bureau of Statistics said China's AI Plus initiative was accelerating the adoption of artificial intelligence across industry and everyday life. The initiative aims to connect AI technologies with manufacturing, services and consumer applications, according to the State Council Information Office.

Integrated circuit output increased 23.3% year on year in the first three quarters of 2026, while digital product manufacturing contributed more than one-third of the growth in industrial value-added output among enterprises above designated size, officials said. The figures indicate that semiconductor production and other digital manufacturing activities are playing a significant role in China's industrial expansion.

AI is also influencing the services sector. Value-added output in information transmission, software and information technology services grew 10.4% year on year in the first nine months, according to the official report. Businesses developing AI models, providing computing resources and integrating software into commercial operations are benefiting from demand for digital services.

The consumer market is another area of expansion. Retail sales of smart wearable devices, including products such as AI glasses, smartwatches and fitness bands, increased more than 70% year on year during the first three quarters. Sales at unmanned retail stores rose more than 25%, reflecting the growing use of automated systems in physical shops.

The growth in AI-related products is supported by investment in manufacturing and information infrastructure. Official figures showed that investment in electronic circuit manufacturing rose 58.7% year on year during the first three quarters, while investment in integrated circuit manufacturing increased 14.2%. Investment in information services grew 20.2%.

These figures cover different segments of the technology economy and should not be treated as a single measure of AI spending. Nevertheless, they illustrate how demand for semiconductors, digital services and intelligent devices is influencing investment decisions across the supply chain.

For manufacturers, AI can support quality inspection, predictive maintenance, production scheduling and product design. For service businesses, it can automate selected tasks and improve the speed of customer interactions. Consumer-facing applications, meanwhile, offer companies new opportunities to develop products that combine software, sensors and connectivity.

However, the commercial impact will depend on whether adoption produces lasting productivity gains and sustainable demand. Companies may need to invest in computing capacity, data infrastructure, cybersecurity and employee training before AI systems deliver meaningful returns. Consumer enthusiasm for new devices can also fluctuate as prices, product quality and practical usefulness become clearer.

China's large industrial base offers technology developers a wide range of real-world applications, from factories and logistics networks to retail stores and consumer electronics. That scale can support faster testing and deployment, although businesses must still address data protection, reliability and the risks of inaccurate automated decisions.

For the broader economy, AI-related manufacturing may help China move toward higher-value industrial production and strengthen the position of domestic suppliers in international markets. Yet strong technology output alone will not resolve weaknesses elsewhere in the economy, including cautious consumer spending and the property downturn.

The latest figures suggest that AI's influence is expanding beyond research laboratories into manufacturing, services and consumer markets. The next challenge will be converting that adoption into durable productivity improvements, commercially viable products and stronger economic demand.