China’s economy experienced a 4.5% year-on-year growth in the third quarter of 2023, according to the National Bureau of Statistics of China. This growth surpassed economists' expectations and marked an increase from the second quarter’s 4.3%. For the first nine months of the year, the economy has grown by 4.6%, indicating a potential alignment with the government's target of 4.5%-5% growth for 2026 without the need for additional stimulus measures.
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In September, industrial production rose by 5.5%, a slight increase from 5.2% in August, while retail sales showed a modest rise of 1.1%, up from 0.4%. Duncan Wrigley, chief China economist at Pantheon Macroeconomics, stated that policymakers in Beijing would likely view their measures to stabilize growth as successful. He noted that the increase in industrial production was partly due to coal mines resuming operations after recent safety inspections. Manufacturing output maintained strong performance at a year-on-year growth of 6.0%, driven by heightened export demand for electronics, AI-related equipment, and automobiles.
Hi-tech manufacturing continues to outpace traditional sectors as China advances in the value-added production chain. However, the country’s fixed-asset investment declined by 7.2% over the first nine months, with property investment dropping by 20.6% and infrastructure spending remaining weak. Recent data indicated that exports surged by more than a third in September, primarily due to an increase in AI-related electronics shipments. Analysts at ABN Amro noted that the GDP growth reflects the ongoing strength of exports driven by the global AI and tech boom, compensating for challenges posed by the conflict in Iran and ongoing domestic demand issues.