China's economic growth may have slowed despite AI boom - forecast

China's economic growth in the third quarter of 2026 could have been about 4.4% year-on-year. Despite strong exports and a boom in sectors related to artificial intelligence, weak domestic demand and lingering problems in the real estate market continue to hold back the world's second-largest economy.

This is according to an estimate by economists cited by Nikkei Asia.

The 4.4% figure is a forecast estimate, not yet released official GDP data for China for July-September. The final statistics are to be published by China's statistical agency.

If the estimate is confirmed, the growth rate will remain below the upper bound of the government's target. For 2026, China set a GDP growth target in the range of 4.5% to 5%.

Exports remain one of the main sources of support for the economy. Demand for technological products and components related to artificial intelligence, data centers, and electronics is particularly strong.

However, this is not yet enough to compensate for domestic weakness. China's real estate market continues to be under pressure, which restrains investment and negatively affects household confidence.

Consumer demand also remains weak. Chinese people are more cautious in spending, and businesses are not rushing to sharply increase investment beyond the most promising technology sectors.

S&P Global Ratings sees a similar picture. The agency notes that strong exports, partly due to global demand for AI products, support Chinese manufacturing, but cannot fully offset weak domestic demand and housing market problems.

In late September, Beijing announced new measures to support the economy, including stimuli for the housing market and additional financing for technology companies. The authorities are trying to support demand while accelerating the development of high-tech industries.

Thus, the technology sector and exports remain among China's main growth drivers, but the overall state of the economy increasingly depends on whether the authorities can revive consumption and stabilize the real estate market.

Based on materials: Nikkei Asia, S&P Global Ratings