China's growth accelerates as AI export boom outweighs domestic weakness

China’s economy picked up pace in the three months to the end of September, recovering from a three-year low as the AI boom gave exports a lift. Official data showed growth at 4.5% in the third quarter, up from 4.3% in the previous period, though still below the 5% rate seen from January to March.

That puts the latest reading right at the bottom of Beijing’s annual target range of 4.5% to 5%. Analysts say that leaves policymakers some room to deal with the country’s bigger economic problems without missing the official goal outright.

Exports have been doing a lot of the heavy lifting. They’ve helped make up for weak spending at home, and China’s trade surplus is on course to pass last year’s record $1.2tn. But the picture is not exactly cheerful. Global trade tensions are still hanging over the export story, and uncertainty around AI investment adds another layer of risk.

China’s National Bureau of Statistics said the economy had “sustained steady development against pressure” and showed “momentum with new growth drivers and improving structure.” That sounds reassuring, but the property market tells a different story. Property investment fell by more than 20% in the first nine months from a year earlier, according to the same official data.

That slump is not new. China has spent years trying to shake off a property downturn after long stretches of overbuilding and heavy borrowing by private developers. The latest export rebound helps, but it doesn’t erase the fact that the domestic side of the economy is still limping.