China's economy grew 4.5% year-on-year in the third quarter, the National Bureau of Statistics said, beating a Reuters poll that had forecast 4.4% and extending a streak of AI-fueled export strength that is propping up growth even as the property sector continues to shrink.
The quarter-on-quarter pace, put by Standard Chartered at 1.2%, picked up from 0.9% in the second quarter. Exports surged more than 16% in the first three months of this year alone, driven largely by semiconductor and AI-related equipment demand, while industrial production rose 5.5% in September, up from 5.2% in August, with electronics manufacturing doing much of the heavy lifting.
A trade surplus on pace for another record
China's full-year trade surplus is now on track to exceed 2025's record of roughly $1.19 trillion, underscoring how central exports have become to the growth story even as Beijing's leadership has spent years trying to rebalance the economy toward domestic consumption. That rebalancing has not materialized: retail sales rose just 1.1% year-on-year in September, and fixed-asset investment fell 7.2% in the first nine months of the year, with property investment down a sharper 20.6%.
The split illustrates a now-familiar pattern in China's post-pandemic economy — a manufacturing and export engine running hot, propped up in recent quarters specifically by AI-linked demand for chips and hardware, alongside a domestic property and consumption slump that shows few signs of turning around.
On track for the official target
GDP expanded 4.6% over the first nine months of the year, keeping China on pace to hit its official full-year target of 4.5% to 5%. Standard Chartered economists described the data as supportive of their 2026 growth outlook, though they cautioned that the export strength driving the beat is concentrated in a narrow set of AI-linked goods rather than broad-based industrial demand.
Exports fuel a 4.5% boost to China's GDP in the third quarter.
Supply Chain Brain, summarizing the official data release
What happens next
Economists will be watching whether the current pace of chip and electronics exports can be sustained into 2027, particularly if global AI infrastructure spending cools or trade tensions with Washington escalate again. For now, the data gives Beijing room to argue its growth target remains achievable without a major new stimulus push, even as the property slump continues to weigh on the finances of local governments and households alike.