China’s Economy Grows 5% as AI Hardware, Advanced Manufacturing Drive Expansion

China has leaned on advanced manufacturing and domestic supply chains to support growth as a prolonged property downturn, uneven consumer demand and geopolitical tensions weigh on the economy. Expanding exports of AI hardware, new-energy vehicles and semiconductor equipment show how policy support is shifting toward technology-intensive industries, while Beijing’s import-substitution drive aims to reduce exposure to foreign restrictions and strengthen industrial self-reliance.

China’s National Bureau of Statistics said gross domestic product grew 5% from a year earlier in the first quarter of 2026, covering January through March, keeping expansion in line with the government’s policy objective. High-tech manufacturing output rose 12.5%, substantially outpacing the broader economy. AI hardware, new-energy vehicles and wafer-fabrication equipment emerged as key export engines, helping cushion the impact of the U.S.-Iran conflict and wider geopolitical and trade pressures.