China GDP growth hits 4.5% in Q3 as AI exports lift economy
China's economy grew 4.5% year-on-year between July and September 2026, the National Bureau of Statistics reported on Monday, beating economists' expectations and up from 4.3% in the second quarter.
China GDP growth hits 4.5% in Q3 as AI exports lift economy
Growth beats forecasts
The National Bureau of Statistics of China put third-quarter china gdp growth at 4.5% year-on-year, a reading released on Monday that topped what economists had forecast and picked up from the 4.3% recorded in the second quarter. Across the opening nine months of 2026 the economy has expanded 4.6%, a pace that keeps Beijing within reach of its 4.5%-5% target for the year without any additional stimulus.
AI exports power manufacturing
September's industrial production climbed 5.5%, faster than August's 5.2%. Duncan Wrigley, chief China economist at Pantheon Macroeconomics, attributed part of that headline rise to coalmines returning to service once safety inspections, triggered by a major accident, had run their course.
Duncan Wrigley noted the strength of factory output tied to overseas orders:
Manufacturing output growth remained robust at 6.0% year on year in September, buoyed up by stronger export demand for electronics, AI-related equipment and autos.
On his reading, hi-tech manufacturing output keeps running ahead of traditional sectors while China moves up the value-added ladder. Trade numbers published the previous week point the same way: shipments abroad jumped by more than a third in September, with electronics linked to AI among the biggest gainers.
Domestic demand stays weak
Away from the factory gate, households and investors were less active in September and the quarter:
- Retail sales rose only 1.1%, up from 0.4% in August
- Fixed-asset investment fell 7.2% over the first nine months
- Property investment tumbled by 20.6%
- Infrastructure spending remained weak
Analysts weigh the outlook
Wrigley said Beijing's policymakers were likely to conclude that their efforts to stabilise headline growth in the quarter succeeded. At ABN Amro, analysts read the faster GDP print as the product of export strength riding the global AI/tech boom, which they saw as outweighing the drag from the Iran conflict and persistently soft demand at home.
