China’s economic growth slowed in the three months to the end of September as problems in the property market persisted and trade tensions with the US flared up.
The world’s second-largest economy grew by 4.8% compared to the same period in 2024, its weakest pace in a year, official figures released on Monday show.
The latest data shows that China’s exports have helped to offset its “sluggish” domestic spending, according to Sheana Yue, senior economist at Oxford Economics.
However, Ms Yue said it was unlikely China’s economic growth this year would exceed 4.8% without further government support, which could come with the new Five-Year Plan laying out Beijing’s economic goals.
In the long-run, housing “is still the major drag on China’s economic growth” even as it faces uncertainty from Washington’s tariffs and other trade barriers, said Prof Wu.
In the three months leading up to the end of September, China’s economic growth slowed as trade tensions with the US erupted and property market issues continued.
Compared to the same period in 2024, the second-largest economy in the world grew by 40.8 percent, which was its slowest growth rate in a year, according to official data released on Monday.
The information follows China’s introduction of broad restrictions on its exports of rare earths, which are minerals necessary for the world’s electronics manufacturing, upending its precarious trade agreement with the United States.
As China’s top leaders meet this week to discuss the country’s economic plan for the next five years, the third-quarter growth numbers will serve as a backdrop.
The annual growth rate of 5.2 percent observed in the three months leading up to July was slower than the most recent growth figure.
The economy exhibited “strong resilience and vitality” in the face of pressure, according to China’s National Bureau of Statistics, which attributed the country’s momentum in the business services and technology sectors as major growth engines.
With the help of government support measures and what was, until recently, a trade ceasefire with Washington, Beijing has managed to avoid a severe downturn and has set a goal of “around 5 percent” economic growth this year.
In a quick response to China’s announcement of rare earth controls earlier this month, US President Donald Trump threatened to impose an additional 100 percent tariff on Chinese imports.
According to US Treasury Secretary Scott Bessent, he hopes to meet with Chinese officials in Malaysia this week in an effort to defuse the situation and arrange a meeting between Trump and his counterpart, Xi Jinping.
Chinese companies had been shipping goods to the US under the trade truce with Washington prior to the recent flare-up, which caused China’s exports to increase by 8.4 percent in September. Additionally, China’s total import value increased.
Chinese manufacturers of robotics, electric vehicles, and 3D printing were among the top performers in the country’s 62.5 percent increase in industrial output last month compared to the same period last year.
Its service sector, which comprises consultancies, transportation and logistics firms, and IT support, also expanded.
China’s “sluggish” domestic spending has been partially offset by its exports, according to the most recent data, said Sheana Yue, senior economist at Oxford Economics.
Beijing has invested billions in incentives like discounts, higher wages, and subsidies to entice residents to spend more and boost the country’s economy.
Ms. Yue, however, stated that without additional government assistance—which might be provided by the new Five-Year Plan outlining Beijing’s economic objectives—it was doubtful that China’s economic growth this year would surpass 4 percent.
With real estate investment dropping 13.9 percent in the year ending in September, China’s real estate market also continued to struggle.
A severe downturn in the housing market is being characterized by declining home prices, dwindling sales, and developer project abandonment.
About a third of China’s economy is made up of the real estate industry, which also provides a significant amount of revenue for local governments.
According to Laura Wu, a lecturer in economics at Nanyang Technological University, home prices have decreased in practically every major city in spite of government assistance programs.
According to Prof. Wu, housing “is still the major drag on China’s economic growth” in the long run, despite the uncertainty caused by Washington’s tariffs and other trade barriers.
