China's economy expanded faster than expected in the third quarter of 2026, supported by resilient exports, strong industrial production, and rising global demand for artificial intelligence-related products. The latest figures suggest that the world's second-largest economy continues to benefit from manufacturing strength despite persistent challenges in consumer spending and the property sector.
According to data released Monday by China's National Bureau of Statistics (NBS), gross domestic product (GDP) increased 4.5% year-on-year during the July-to-September quarter. The result exceeded economists' forecasts of 4.4% growth and improved from the 4.3% expansion recorded in the previous quarter.
On a quarterly basis, China's GDP rose 1.2%, surpassing market expectations of 1.1% and accelerating from the 0.9% growth registered in the second quarter.
For the first nine months of 2026, China's economy expanded 4.6%, keeping growth within Beijing's official annual target range of 4.5% to 5%.
The stronger-than-anticipated performance was largely driven by robust factory output and sustained international demand for Chinese manufactured goods. Exports of specialized materials, semiconductor components, and equipment associated with artificial intelligence infrastructure helped support economic activity.
Growing investment in AI technology and data centers worldwide has provided additional opportunities for Chinese manufacturers, strengthening the country's export-oriented industries.
However, domestic consumption remained a significant weakness. Chinese households continued to demonstrate cautious spending behavior despite government initiatives designed to stimulate demand and improve economic confidence.
Seasonal spending during September's autumn festival holidays offered some relief, although the broader recovery in consumer demand remained limited.
Meanwhile, China's prolonged property market downturn continued to weigh on economic sentiment, highlighting the uneven nature of the country's recovery.
The latest China GDP data underscores a widening contrast between strong industrial and export performance and weaker domestic economic activity. While manufacturing and technology-related demand have helped sustain growth, policymakers still face challenges in encouraging household spending and stabilizing the real estate sector.
Although China's third-quarter economic growth exceeded forecasts, the economy continues to expand more slowly than in previous years. Beijing's ongoing stimulus measures have provided some support, but their limited impact on domestic demand suggests that maintaining growth momentum could remain challenging in the coming quarters.
