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China's economy grows 4.5% in third quarter, a little faster than expected
Exports carried Beijing through July-September, while retail sales and factory output picked up in September. Investment and property are still shrinking.
Key points
- China's GDP grew 4.5% year on year in July-September, up from 4.3% in the second quarter.
- Growth for the first nine months was 4.6%, inside Beijing's 4.5%-5% target for the year.
- Property investment fell 20.6% in January-September, and fixed-asset investment fell 7.2%.
China’s economy grew 4.5% in the July-September quarter from a year earlier, a touch faster than economists had expected, as strong exports made up for weak spending at home and a property market that is still contracting.
The National Bureau of Statistics released the figures in Beijing on Monday morning. Growth picked up from 4.3% in the April-June quarter and beat the 4.4% most forecasters had pencilled in. Over the first nine months of the year the economy grew 4.6%, with output worth about 107.11 trillion yuan, or roughly $15.94 trillion.
That keeps Beijing inside the target it set for 2026, growth of 4.5% to 5%, a lower bar than the 5% it aimed for last year. The International Monetary Fund expects 4.5% for the full year.
Shoppers and factories
The September numbers offered some comfort. Retail sales rose 1.1% from a year earlier, up from 0.4% in August, the fastest since March, though still weak by China’s own past standards. Industrial output grew 5.5% in September, from 5.2% the month before.
Over the nine months, industrial value added was up 5.3%. Equipment manufacturing grew 10.2% and high-tech manufacturing 14.3%, the parts of the economy Beijing has been pushing hardest. Retail sales of services rose 5%.
The statistics bureau said the economy had “forged ahead against pressure and continued to shift toward innovation-driven, high-quality development.” Mao Shengyong, the bureau’s deputy head, presented the data at a press conference.
The surveyed urban unemployment rate averaged 5.2% over the nine months, unchanged from a year earlier. In September it was 5.2%, down 0.1 percentage point from August.
The weak spots
Underneath the headline figure, the slump in building and investment has not let up. Fixed-asset investment fell 7.2% in January-September, and property investment dropped 20.6%. The IMF has urged Beijing to put more money behind households and local governments to lift demand.
Exports did most of the work. Chinese goods kept flowing abroad through the summer and the trade surplus widened, which helped growth but adds to friction with trading partners.
Why it matters for India
China is India’s largest source of imports. A Chinese economy that leans on exports while demand at home stays soft means more competition for Indian manufacturers, at home and in third markets, in steel, chemicals, electronics and solar equipment.
What comes next
The data opens a busy week for Asian economies. China sets its benchmark lending rates later this week, the Bank of Korea decides on interest rates on Thursday and Japan publishes inflation figures.