China’s growth picks up as AI demand boosts exports

China’s economy grew by 4.5% in the third quarter as demand for technology exports helped offset domestic weakness. Growth accelerated from the previous period but remained below the 5% expansion recorded from January to March. The result sits at the bottom of Beijing’s annual growth target of 4.5%-5%.

Global demand for chips and other components used in AI data centres has supported manufacturing. Sales of high-tech goods rose by 14.3%, while production of batteries and industrial robots grew by more than 29%. China’s trade surplus is on track to surpass last year’s record $1.2tn (£900bn).

Domestic demand remains under pressure from weak wage growth, high youth unemployment and a prolonged property downturn. Property investment fell by more than 20% in the first nine months compared with the same period last year. Oxford Economics researcher Sheana Yue said trade uncertainty and geopolitical tensions were also making consumers more pessimistic and reluctant to spend.

Beijing unveiled support measures in September, including lower interest rates for some businesses and subsidies for property buyers, but their effects remain unclear. Economists warn that reliance on exports leaves growth exposed to trade tensions. Western resistance to cheap Chinese goods and doubts about the profitability of heavy AI infrastructure spending add further risks.