China's growth accelerates as AI boom helps boost exports

Key points

• China's economy grew 4.5% in the third quarter, at the low end of its 4.5%-5% annual target.
• Exports, including AI-related technology goods, have offset weak domestic spending.
• Property investment fell more than 20% in the first nine months compared with last year.

China's economy grew by 4.5% in the third quarter, up from the previous period but below the 5% expansion recorded from January to March, according to official Chinese data. The figure sits at the bottom end of Beijing's annual growth target of 4.5%-5%, which analysts have said gives policymakers room to address the country's economic challenges.

The National Bureau of Statistics said on Monday that the economy "sustained steady development against pressure", citing new growth drivers and an improving structure. Exports have helped offset weak spending at home, while global trade tensions and uncertainty over AI investments cloud the outlook.

Exports and the AI boom

Rising exports have put China's trade surplus on track to overtake the record $1.2tn (£900bn) seen last year. Global demand for computer chips and other components used in AI data centres has eased pressure on Beijing and cushioned the impact of sluggish domestic consumption.

Oxford Economics researcher Sheana Yue said manufacturing and high-tech exports have boosted growth despite weak investment and domestic spending. Moody's Analytics economist Dave Chia said the effects of Beijing's targeted support measures for businesses have yet to be seen, and flagged risks including China's reliance on a "single external engine" in exports.

sustained steady development against pressure

— China's National Bureau of Statistics

Property slump weighs on consumers

Property investment fell by more than 20% in the first nine months from the same period last year, official data showed. China's economy has struggled to shake off a long-running property slump after years of overbuilding and excessive borrowing by private developers, and Yue said there are still no signs the trend will end soon.

Trade uncertainties and geopolitical issues have also made Chinese consumers more "pessimistic" and unwilling to spend, Yue added. In September, Beijing unveiled support measures including lower interest rates for some businesses and subsidies for property buyers.