China's Q3 GDP grows 4.5%, with AI-driven high-tech exports offsetting weak domestic demand

The National Bureau of Statistics of China released data on October 19, 2026, showing that China's Gross Domestic Product (GDP) grew by 4.5% year-on-year in the third quarter. This represents an acceleration from the 4.3% recorded in the second quarter (a three-year low), though it remains below the 5.0% expansion seen in the first quarter. The figure sits at the lower end of Beijing's annual growth target range of 4.5%-5%.

While domestic spending and investment remain weak—with property investment falling by more than 20% in the first nine months—the export sector has performed strongly. Official figures indicate that the value-added of high-tech manufacturing rose by 14.3% year-on-year in the first three quarters. Notably, production of industrial robots and lithium-ion batteries surged by 29.1% and 39.5%, respectively. Media analyses, including reports from the BBC, attribute this strength to the global artificial intelligence (AI) boom, which has boosted demand for computer chips and components used in building AI data centers, thereby helping to offset weak domestic spending.

Sheana Yue, a researcher at Oxford Economics, noted that manufacturing and high-tech exports have boosted China's growth despite weak investment and domestic spending. However, she highlighted that trade uncertainties and geopolitical issues have made Chinese consumers more pessimistic and unwilling to spend. Additionally, there are growing concerns from Western economies regarding competition from cheap Chinese goods, as well as doubts about whether the billions spent on AI infrastructure will deliver promised profits, clouding the outlook.