Beijing, Oct 19:
China’s economy grew 4.5% year-on-year in the July-September quarter, accelerating from 4.3% in the previous quarter as strong exports and manufacturing activity helped offset persistent weakness in domestic consumption and the property sector.
The latest growth figure brings China closer to its annual economic target of 4.5% to 5%. The economy had expanded by 5% in 2025, and the current pace suggests that Beijing may achieve the lower end of its target despite mounting trade pressures and uneven domestic recovery. The third-quarter performance also exceeded expectations, offering some reassurance to policymakers as the year approaches its final months.
Exports have been a major source of support. China’s shipments abroad rose sharply in September, with technology-driven products such as semiconductors, electric vehicles and other manufactured goods contributing to the expansion. The country is also diversifying its export markets as US tariffs and other trade barriers affect bilateral commerce. Markets in Southeast Asia, Latin America and Europe have become increasingly important destinations for Chinese products.
However, the export-led recovery has not translated into equally strong domestic demand. The prolonged downturn in the property market has weakened household wealth and encouraged families to save rather than spend. Businesses also face pressure from excess manufacturing capacity and intense price competition. Economists have warned that headline GDP growth does not fully reflect differences in economic conditions across industries, regions and households.
China’s growing trade surplus is also generating concern among its trading partners. European countries, in particular, have raised questions about the impact of lower-priced Chinese manufactured goods on their own industries and employment. Measures to restrict imports or reduce trade imbalances could add to tensions between Beijing and major economies.
The challenge for Chinese policymakers is to sustain growth while making the economy less dependent on exports and manufacturing investment. Stronger household consumption, confidence in the property market and broader income growth will be important if the recovery is to become more balanced. The latest figures indicate resilience, but the weakness of domestic demand remains a significant risk to the country’s longer-term economic outlook.