China's economy expanded by 4.5% in the third quarter to the end of September, rebounding from its weakest period in three years as artificial intelligence-driven exports lifted the world's second largest economy, according to official Chinese data. The growth rate sits at the bottom end of Beijing's annual target range of 4.5% to 5%, though it represents an improvement from the previous quarter. China's National Bureau of Statistics said the economy "sustained steady development against pressure" and showed "momentum with new growth drivers and improving structure".
High-tech exports have been the primary force keeping growth afloat. Sales of high-tech goods rose by 14.3%, while production of batteries and industrial robots each grew by more than 29%, official figures showed. With exports climbing, China's trade surplus is on track to surpass the record $1.2 trillion seen last year. Global demand for computer chips and components used in artificial intelligence data centres has eased pressure on Beijing and cushioned the impact of weak consumer spending at home.
However, significant headwinds remain. Property investment fell by more than 20% in the first nine months compared with the same period last year, continuing a long-running slump that has plagued the economy for years. Sheana Yue, a researcher at Oxford Economics, said there are still no signs this trend will reverse soon. Chinese consumers have become more pessimistic due to trade uncertainties and geopolitical issues, making them unwilling to spend despite weak wage growth and high youth unemployment.
Analysts warn that China's reliance on exports creates vulnerability. Dave Chia, an economist at Moody's Analytics, highlighted concerns over the country's dependence on a "single external engine" in exports. There are also concerns about whether companies investing billions in artificial intelligence infrastructure can deliver on promises of generating substantial profits. Beijing has unveiled support measures including lower interest rates for some businesses and subsidies for property buyers, though their effects have yet to materialise.
For British savers, borrowers and investors, China's continued economic uncertainty and export-led growth model may affect global supply chains, investment returns and inflation pressures in the UK.
Beijing faces growing backlash from Western economies including the US and European Union as manufacturers struggle to compete with large amounts of cheap Chinese goods, adding another layer of risk to the global trade environment.