China’s economy expanded by 4.5% in the third quarter, marking a rebound from a three‑year low and bringing annual growth back to the bottom of Beijing’s 4.5‑5% target range. The uptick follows a 5% expansion recorded in the first quarter, according to data released by the National Bureau of Statistics.
Exports and high‑tech sector drive the rebound
The latest growth was buoyed by a surge in exports, especially of high‑technology products linked to the artificial intelligence (AI) boom. Sales of high‑tech goods rose 14.3% year‑on‑year, while production of batteries and industrial robots each grew by more than 29%.
The trade surplus is on track to exceed the record $1.2 trillion reached last year, as foreign demand for computer chips and other AI data‑centre components helped offset weak domestic consumption.
Oxford Economics researcher Sheana Yue highlighted that manufacturing and high‑tech exports have become key drivers of growth, even as investment and household spending remain subdued.
Domestic challenges persist
Despite the export lift, China continues to grapple with a deepening property slump. Official figures show property investment fell by over 20% in the first nine months compared with the same period a year earlier. The sector has been weighed down by years of overbuilding and high debt levels among private developers, and Yue warned that there are no clear signs of an imminent turnaround.
Consumer sentiment has also turned pessimistic, with Chinese households reluctant to spend amid lingering trade tensions and geopolitical uncertainty. Youth unemployment remains high and wage growth weak, further dampening domestic demand.
Policy response and lingering risks
In September, Beijing announced a package of support measures, including lower interest rates for certain businesses and subsidies for property buyers, aimed at stimulating activity. Dave Chia of Moody’s Analytics noted that the impact of these measures has yet to be seen and cautioned that the economy remains heavily reliant on a “single external engine” – export growth.
Western backlash adds another layer of complexity. The United States and the European Union have raised concerns about Chinese manufacturers competing with cheap imports, and there is scrutiny over the billions of dollars being poured into AI infrastructure, with questions about whether the promised returns will materialise.
Overall, the third‑quarter data suggest that AI‑driven export growth is providing a temporary cushion for China’s economy, but structural weaknesses in the property market and domestic consumption, combined with external trade pressures, continue to pose significant challenges for sustained expansion.
Helene Elliott is the Lead Science & Space Reporter at News Raise. She reports on aerospace missions, astrophysics discoveries, quantum research, and environmental technology.
