Name: China infrastructure spending growth in 2026 not fueled by AI
Uploaded: 2025-11-24T14:27:57.328Z
Duration: 2 min 52 s
Description: Louis Kuijs of S&P Global Ratings is raising his China growth forecast to 4.4% from 4%, saying he expects an increase in consumption and investment. He also notes that investment plans by Chinese tech firms are on a much smaller scale than in the U.S.

Louis Kuijs of S&P Global Ratings is raising his China growth forecast to 4.4% from 4%, saying he expects an increase in consumption and investment. He also notes that investment plans by Chinese tech firms are on a much smaller scale than in the U.S.

Beijing

China's economic growth forecast for 2026 has been raised from 4% to 4.4%, despite expectations for subdued domestic demand and a slowdown in export growth. The increase is attributed mainly to continued investment in traditional infrastructure projects, with only a modest contribution from artificial intelligence-related spending.

While the U.S. is experiencing significant economic boosts from AI-driven capital expenditures, China's approach focuses on using AI to improve productivity across industries and households rather than large-scale investments in data centers. Chinese tech companies have announced AI investment plans, but these are considerably smaller than those of their U.S. counterparts.

China infrastructure spending growth in 2026 'not fueled' by AI

I want to get you to talk a little bit more about your forecast for China. That's a big jump. You were looking for 4% even growth before, now you're up to 4.4. Even while you think that domestic demand in China is going to stay pretty subdued, and you actually see exports slowing. So where is the growth going to come from to drive China to 4.4 from 4? Because that's a pretty big jump, especially for an economy that size. Yeah, you know, the Chinese picture is always complicated. So on the export front, we think exports will slow from very good growth last year in 2025 to more modest growth in 2026. So we still have a bit of export growth, just not as much as last year, as 2025. And on the domestic demand front, the story is a bit the same. We don't think that domestic demand growth will speed up next year, but there will still be growth of consumption, and there will also be some pickup on the investment front, especially on the infrastructure front. So all in all, we are still able to creak out some growth rate between around 4.5% probably. Wow. Okay, Louis, listen, here's a question for you. You know how folks have been talking about the AI trade and all this, CapEx into data centers, et cetera, resulting in a huge boost for the U.S. economy. Are we starting to see something similar in China? And when we talk about infrastructure spending, is it related to the AI explosion in China or not yet? You know, overall, the infrastructure story is driven by other forces, I would say. The government's imperative to keep growth up, local government's imperative to keep growth up, all kinds of pretty mundane infrastructure. But I do think that technology theme and that these drives, like we need to upgrade our industrial structure and we want to. China is having a little bit of a different strategy than the U.S. on AI. They focus a lot on how can our overall economy do better with AI, like in terms of how can industry and households use AI to become more productive and more efficient. So there is a little bit of that AI theme. It's just that you don't see these insane numbers of investment by the hyperscalers. Like the Chinese versions of the hyperscalers, if you think like the big tech companies, they have announced large investment plans, but these Chinese investment plans are a factor of six, seven smaller than their U.S. equivalents.

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