Goldman Sachs Raises China AI Growth Forecast, Citing Faster Adoption

Goldman Sachs analysts have revised their forecast for China's AI-driven economic growth, projecting a faster adoption rate and a greater impact on GDP than previously expected. The bank now estimates AI will boost China’s annual GDP growth by 0.2-0.3 percentage points by 2030, up from its earlier estimate of 0.1 percentage points.

While AI's automation benefits are more pronounced in advanced economies like the U.S., China's workforce—with 50% employed in agriculture, manufacturing, and construction—limits immediate productivity gains. Consequently, the bank has slightly reduced its long-term AI-induced productivity growth estimate for China from 9% to 8%.

However, rapid advancements in Chinese AI models, such as DeepSeek, signal accelerated AI adoption. Analysts expect China to integrate AI into production processes swiftly, mirroring trends in developed markets. AI-related capital expenditures in China are projected to surge between 2025 and 2027, potentially reaching 1% of GDP by 2030.

Goldman Sachs cautions that AI could disrupt China’s labor market, especially low-skilled service jobs. Yet, AI-driven automation may mitigate the impact of the country’s declining working-age population over time. Despite these developments, the bank has not altered its overall China GDP forecast due to uncertainties in AI's future trajectory, though a more rapid AI investment cycle could further boost growth projections.