Chipmakers, electronic-component exporters and robot makers are carrying China's industrial expansion while consumer goods sales grew 1.1%, so growth leans heavily on AI-related production and exports.
China’s economy grew 4.5% year on year in the third quarter, and the National Bureau of Statistics (NBS) used its October 19 briefing to credit digital and AI-related industries with a large share of that output. Value added at digital product manufacturers above the designated size, the NBS threshold for larger firms, contributed more than a third of industrial growth in the first nine months, NBS spokesperson Wang Guanhua said, according to the bureau’s transcript of the press conference. Integrated-circuit output rose 23.3% over the same period.
The headline growth figure beat the 4.4% consensus compiled by Reuters and Bloomberg, the Seoul Economic Daily reported. The bureau’s English release puts GDP for January to September at RMB107.1 trillion, up 4.6%, after quarterly growth of 5.0%, 4.3% and 4.5%. Wang described AI as shifting from a "technology option" to "standard equipment for production" (从"技术选项"变成"生产标配").
The industry figures show where the momentum sits. Consumer goods sales grew 1.1% and fixed-asset investment fell 7.2%, so a narrow group of electronics, chip and robotics makers accounts for a disproportionate share of the expansion.
Chip and electronics output outpaced the rest of industry
Industrial value added rose 5.3% in the first nine months, according to the bureau’s separate industrial production release. High-tech manufacturing grew 14.3%, and the computer, communications and other electronic equipment sector grew 15.8%, rising to 16.4% in September alone. China produced 442.8 billion integrated circuits from January to September, including 54.3 billion in September, when output rose 18.4%. Industrial robot output reached 794,781 units, up 29.1%.
NBS deputy head Mao Shengyong, identified by Xinhua, gave the sharper numbers at the briefing. Value added in integrated-circuit manufacturing grew 79.2% in the first three quarters, the fastest of the high-tech segments the bureau singled out. Spacecraft and launch vehicle manufacturing grew 36.2% and optoelectronic devices 28.4%. Digital product manufacturing value added rose 13.6%, 1.3 percentage points faster than in the first half, and high-tech manufacturing’s share of industrial value added climbed to 18.3%.
Mao also said AI adoption in key use cases had passed one-third of manufacturers above the designated size, and that China had built more than 56,000 basic-level, 9,000 advanced-level and 500 excellence-level smart factories. He estimated that new growth drivers, including high-end manufacturing and the digital economy, contributed more than 40% of GDP growth.
Hardware, exports and investment carry the AI story; consumer devices lag
The AI-related gains are concentrated upstream. Output of microcomputers fell 15.0% to 212.6 million units in the first nine months, and smartphone output fell 9.0% to 817.63 million, with a 26.6% drop in September. Service robot output rose 7.9% for the period but fell 17.8% in September.
Wang said investment in electronic circuit manufacturing rose 58.7%, integrated-circuit manufacturing 14.2% and information services 20.2%, figures also reported by Securities Times in a report republished by Sina Finance. Across all high-tech industries, investment rose 4.9%. Value added in information transmission, software and IT services grew 10.4%, with AI cited as an important driver.
Exports grew far faster than domestic sales. Total goods exports reached RMB23.2 trillion, up 16.4%, and mechanical and electrical products rose 23.7%, the NBS release shows. Wang said electronic component exports grew 70% and wire and cable exports 25.3%. In September, China’s dollar exports rose 36.3% to US$447.18 billion and semiconductor exports more than doubled, Al Jazeera reported, citing customs data. "High-tech demand, supported by the global and domestic AI upcycle, remained the key driver," HSBC economist Taylor Wang told Al Jazeera. EastFrontier has reported that integrated-circuit export value is rising far faster than volume.
Weak household demand is the counterweight officials acknowledged
AI has reached consumers only in pockets. Wang said retail sales of wearable smart devices at larger retailers grew more than 70% and unmanned-store sales more than 25%, while communication equipment sales rose 18.1%. Final consumption contributed 46.7% of GDP growth. Mao acknowledged in response to a Reuters question that "domestic demand is not strong" (内需不强) and that supply was outrunning demand, while arguing that the nine-month data showed gradual improvement.
The bureau’s English release likewise lists an unstable external environment and weak domestic demand among its concerns. Investors in Chinese hardware have already seen the effect in earnings, where CXMT’s profit forecast led a wave of upbeat A-share results. October trade data, which the Seoul Economic Daily said could push the year’s trade surplus above US$1 trillion, will show whether the electronics export run continues into the fourth quarter.