China's economic growth picks up as AI boom boosts exports
Exports have helped offset weak domestic spending, but trade tensions and AI doubts weigh on the outlook.
China’s economic growth accelerates as AI surge lifts exports
China’s economy gained pace in the three months through the end of September, recovering from a three-year low as the artificial intelligence (AI) boom supported exports.
The world’s second-largest economy expanded by 4.5% in the third quarter, up from 4.3% in the previous period but below the 5% growth seen from January to March.
The latest reading sits at the lower end of Beijing’s annual growth target of 4.5%-5%, which analysts say leaves policymakers room to tackle the country’s economic difficulties.
Exports have helped make up for weak domestic spending, but global trade tensions and uncertainty around AI investment are clouding the outlook.
China’s National Bureau of Statistics said on Monday that the economy "sustained steady development against pressure" and showed "momentum with new growth drivers and improving structure".
As exports rise, China’s trade surplus - the gap between the goods and services it sells overseas and what it imports from other countries - is on course to surpass last year’s record $1.2tn (£900bn).
However, official data also showed that property investment dropped by more than 20% in the first nine months compared with the same period last year.
China’s economy has been struggling to emerge from a prolonged property downturn, following years of overbuilding and excessive borrowing by private developers.
The technology sector has been a major engine of China’s growth in recent quarters.
Strong global demand for computer chips and other parts used to build AI data centres has helped ease pressure on Beijing and soften the blow of sluggish domestic consumption.
Chinese companies have relied heavily on exports as a drawn-out property slump, weak wage growth and high youth unemployment have weighed on consumer spending at home.
In September, Beijing announced a series of support measures, including lower interest rates for some businesses and subsidies for property buyers, in an attempt to lift the economy.
But Beijing is facing pushback from Western economies - including the US and European Union - as manufacturers struggle to compete with large volumes of cheap Chinese goods.
There are also worries about the billions of dollars being poured into AI infrastructure and whether the companies making those investments can deliver on their promises of generating huge profits.