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Daily Briefing

China’s Thriving New Energy Exports

The Iran war has been a gift to the country’s vehicle, solar, and battery business.

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Xi Jinping.
Heatmap Illustration/Getty Images

This is Heatmap Daily, a weekday evening digest written by our executive editor.

Happy Monday and welcome back. For months now, we’ve been talking about how the U.S. and Israel’s war in Iran has been a boon for electric vehicles, clean energy, and (unfortunately) coal.

But today we got data that confirms: This clean energy export boom is not just a side story. It is one of the brighter spots in the overall Chinese economy, which remains the world’s second largest.

According to economic data released on Monday, China grew 4.5% during the summer quarter as compared to the quarter from a year earlier. That means the country will likely hit its growth target this year, albeit on the low end.

The country’s economic expansion wasn’t driven by domestic consumption, however. Consumer confidence remains low, and residential investment has yet to return after the property crash earlier this decade.

Instead, booming exports are now driving China’s economy. Exports were more than 36% higher in September than a year earlier, driven by chips, ships, electric vehicles, and solar panels and batteries. The country will likely record its biggest trade surplus ever this year.

Some of those categories are clearly flourishing thanks to the global AI boom — think chips and even batteries. But the preponderance of vehicle exports suggests surging oil prices aren’t hurting. Sales of ‘new energy vehicles,’ a category that includes 100% electric vehicles and plug-in hybrids, were up more than 13% on a year-over-year basis in September, according to the Chinese car manufacturer’s trade group. But exports of these vehicles are booming. Battery electric vehicles were up 130% last month compared to the same period in 2025, and plug-in hybrid exports were up more than 200%.

It’s interesting to consider how much the Chinese and U.S. economy are mirroring each other at this moment. Americans are dealing with a remarkable investment boom, which is buoying the labor market and stubbornly maintaining high inflationary pressure. China is struggling with deflation, and exports are its quickest path to growth. (Consumer sentiment in both countries, interestingly, seems to be in the doldrums, even though American consumers appear to be in much better shape.)

When thinking about what artificial intelligence could do for the United States over the next decade, some subject-matter prognosticators (and even some Anthropic employees) imagine a world of 4%, 5%, or even 7% GDP growth. Such a growth rate is difficult even to envision in the modern era, of course, and it seems like it could propel the U.S. economy to staggering prosperity.

I know better than to make a prediction about where we’re headed. But amateur economic commentators should keep China in mind, too: a country that dominates along many technological axes, but where the standard economic math of supply, demand, and consumer sentiment still holds. Except if the United States economy were to stumble, no exterior source of demand will come to our rescue.

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