China's Q3 Growth Reaches 4.5% as AI Component Exports Rise

What changed

China’s economy grew 4.5% year on year in the third quarter, up from 4.3% in the previous quarter but below the 5% recorded from January to March. Exports, especially computer chips and components used in AI data centres, helped lift growth as domestic spending stayed weak; the trade surplus is on track to exceed last year’s record $1.2tn.

Why it matters

China is meeting the lower edge of Beijing’s 4.5%-5% annual growth target, but the engine is lopsided. Property weakness, soft wage growth and high youth unemployment are keeping consumers cautious, leaving manufacturers more dependent on overseas demand.

That puts Beijing in a narrow lane. September measures, including lower rates for some businesses and subsidies for property buyers, are aimed at reviving activity at home. Yet large exports of cheap Chinese goods are already drawing opposition from the US and European Union, while the payoff from billions spent on AI infrastructure remains uncertain.

The near-term outlook is therefore better than the previous quarter, but not comfortably secure. Growth could hold up if global demand for AI components remains strong; if trade tensions intensify or AI investments fail to produce the expected profits, China will have fewer easy ways to replace weakening domestic demand.