China's economy accelerated from a three-year low in the third quarter: official figures released on Monday show gross domestic product (GDP) grew by 4.5 percent in the three months ending in September, a report cited by the BBC said. The pace is faster than in the previous quarter but below the 5 percent growth recorded in the first quarter of the year.
The result sits at the lower bound of Beijing's 2026 growth target range of 4.5–5 percent, a level analysts say could give policymakers room to focus on structural problems.
Role of AI investments and tech exports
The technology sector — notably investments related to artificial intelligence — has become one of the main engines of growth. Global AI spending has raised demand for computer chips, data centers and related components, from which Chinese exporters have benefitted significantly. Stronger exports have in part offset weak domestic consumption.
Sheana Yue of Oxford Economics says exports of manufactured goods and high-tech products have provided substantial support to the economy, even as investment and domestic demand remain weak.
China's trade surplus could, thanks to the export surge, even exceed last year's record US$1.2 trillion.
Deep domestic problems behind the headline GDP figures
Despite the stronger headline numbers, major domestic imbalances persist. China has not emerged from a multi-year property-market crisis: official data show property investment fell by more than 20 percent in the first nine months of the year compared with the same period a year earlier. The roots of the problem are traced to developers' previous heavy indebtedness and years of overbuilding.
Trade uncertainty and geopolitical tensions are also weighing on consumer sentiment. Households have grown more pessimistic and many are cutting back on spending, limiting the scope for a near-term rebound in consumption.
Beijing's measures and international implications
In September, Beijing announced a series of stimulus measures, including lower borrowing costs for certain firms and support for homebuyers. The statistics agency said the economy showed stable development despite difficulties, with new growth drivers emerging and an improving structure — yet it also noted that addressing the property-sector crisis and reviving domestic demand will likely be necessary for sustained recovery.
The export-driven upswing is provoking increasing pushback in the United States and the European Union: Western manufacturers find it hard to compete with large volumes of low-cost Chinese goods. Trade tensions therefore remain a significant risk for China and for global supply chains. There are also open questions about whether the billions poured into AI infrastructure worldwide will deliver the expected returns and whether the companies making those investments can achieve the large profits they have projected.
Outlook
The Q3 GDP reading marks a favorable turn after earlier softness, but China's outlook depends heavily on whether the technology-export momentum endures and whether the government can repair the property market and restore household confidence. Analysts say tackling structural issues and boosting domestic demand will be essential for a sustained, longer-term recovery.
