China's economy expanded more strongly than anticipated in the third quarter, supported by vigorous exports and resilient industrial activity even as consumers remained cautious and investment continued to weaken. Gross domestic product increased 4.5% from a year earlier during the July-to-September period, according to state figures. The result exceeded forecasts from economists and marked an improvement from the 4.3% expansion recorded in the previous quarter.
For the first three quarters combined, economic growth hit 4.6%. That pace leaves Beijing on course to meet its full-year objective of between 4.5% and 5%, potentially without additional stimulus. China's performance comes despite several external pressures that have weighed on economies elsewhere. The country has absorbed the impact of U.S. tariff measures introduced under President Donald Trump, although Washington and Beijing have since agreed to a temporary pause in their trade confrontation. The conflict involving the United States and Iran has also created broader economic uncertainty and disrupted growth in other markets.
Factory activity provided much of the momentum. In September, output increased 5.5% compared with the same month a year earlier. Consumer spending, by contrast, remained subdued. Retail sales grew just 1.1%, although that was an improvement from August's 0.4% rise. According to Pantheon Macroeconomics economist Duncan Wrigley, policymakers in Beijing view the latest figures as evidence that efforts to support economic activity had delivered results. He noted that manufacturing production rose 6% annually in September, helped by stronger overseas demand for electronics, artificial intelligence equipment and vehicles. Higher-value technology industries have continued to outperform older manufacturing segments, reflecting China's efforts to move toward more sophisticated production.
Not all parts of the economy are showing similar strength. Investment in fixed assets declined 7.2% this year, while property investment plunged 20.6%. Infrastructure expenditure also remained under pressure. Exports have been a particularly important source of support. Figures released recently showed overseas shipments jumped by over 30% in September, with electronics linked to the AI boom contributing to the increase. ABN Amro analysts said the stronger GDP performance appeared to reflect sustained demand for Chinese technology and manufactured goods abroad, which has helped counter weaker domestic activity and the effects of geopolitical tensions.
The figures nevertheless highlight a major structural problem for Beijing. China is increasingly dependent on industrial production and foreign buyers while household spending and investment struggle to regain momentum. Economists have described the situation as a two-tier economy. Advanced manufacturing and exports are expanding rapidly, while domestic consumption remains sluggish. The prolonged property crisis adds another burden, with housing accounting for a large share of household wealth and continuing to weigh on confidence and spending.
AI is continuing to support economic activity not only in China but around the world, and the gains made by firms like AI Maverick Intel Inc. (OTC: AIMV) can be extrapolated to show how the growth figures of entire economies stack up, one company at a time. As AINewsWire, a specialized communications platform focused on artificial intelligence, notes, the AI boom is a global phenomenon. The platform is part of the Dynamic Brand Portfolio at IBN, which provides access to wire solutions via InvestorWire and editorial syndication to 5,000+ outlets. For more information, visit www.AINewsWire.com. The full terms of use and disclaimers are available at https://www.AINewsWire.com/Disclaimer.
