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China's economy grows faster than forecast as AI-driven exports lift output

China's GDP grew 4.5% in Q3, beating forecasts as AI-related exports lifted output, The Guardian reported.

AI News Feed · 2026-10-19 20:22

The first nine months of the year produced growth of 4.6%, putting China on track to meet the government's 2026 target of 4.5% to 5% without additional stimulus measures, according to the data. Industrial production rose 5.5% in September from a year earlier, up from 5.2% in August, while retail sales increased 1.1%, compared with 0.4% in the previous month.

Duncan Wrigley, chief China economist at Pantheon Macroeconomics, said Beijing's policymakers were likely to conclude that their efforts to stabilise headline growth in the third quarter had succeeded. Headline industrial production rose in September partly as coalmines resumed operations after safety inspections prompted by a major accident, Wrigley said. Manufacturing output growth remained robust at 6.0% year on year in September, supported by stronger export demand for electronics, AI-related equipment and autos, he said.

Wrigley added that hi-tech manufacturing output continued to outperform traditional sectors as China climbed the value-added ladder.

The stronger headline figures accompanied persistent weakness in investment. Fixed-asset investment fell 7.2% over the first nine months of the year, property investment tumbled by 20.6%, and infrastructure spending remained weak, The Guardian reported.

Data published last week showed China's exports surged by more than a third in September, lifted by an increase in shipments of electronics related to AI. Analysts at ABN Amro said the pickup in GDP growth mainly reflected ongoing export strength from the global AI and technology boom, which more than offset drags from the Iran conflict and continued weakness in domestic demand.

Editor's Summary

China's third-quarter GDP growth accelerated to 4.5% as AI-related export demand supported industrial output, leaving growth at 4.6% in the first nine months and within reach of the government's 2026 target. Domestic demand remained soft, with retail sales up 1.1% in September and fixed-asset and property investment declining.