Chinese firms lag global peers on returns as AI power demand offers opportunity

Chinese companies remained less profitable than their global counterparts in the first half of 2026, although the country’s power capacity could give it an advantage as demand for artificial-intelligence data centres grows, according to Natixis. The French bank’s China corporate monitor found that profit margins at Chinese firms had stabilised at about 4.5%, compared with nearly 9% among global peers. Returns on capital stood at around 6% in China, against more than 11% globally.

The comparison covered about 2,300 Chinese firms and 9,000 companies overseas. Natixis economists said Chinese businesses continued to face difficulties generating revenue and improving capital returns, although the debt burden had fallen substantially. The report also highlighted differences between central state-owned enterprises and private companies.

Interest costs for central state-owned firms fell to 2.2%, compared with 3.2% for private firms, giving the former a borrowing advantage. Private firms, however, remained more profitable. Natixis described energy capacity as a potential strength for China in the artificial-intelligence economy.

The bank estimated that AI data centres would account for about 5% of China’s annual increase in power consumption, compared with 48% in the United States, 28% in Europe and 66% in Japan. Economists said China therefore had room to continue building data centres. They also said exports of power equipment used by such facilities had risen sharply and become an important source of export growth.

Natixis said the outlook could depend on international resistance to Chinese technology and equipment. Its economists nevertheless viewed data-centre electrical equipment as a promising area for Chinese companies.