Listen to the article
China’s economic growth slowed to its weakest pace in a year during the July-September quarter, expanding by just 4.8% as ongoing trade tensions with the United States and lackluster domestic demand weighed on the world’s second-largest economy.
The latest quarterly figure marks a notable deceleration from the 5.2% growth recorded in the previous quarter, according to government data released Monday. For the first nine months of the year, the economy maintained a 5.2% annual growth rate, still within range of the government’s official target of around 5%.
Despite facing increased tariffs from the United States, China has managed to sustain relatively robust export performance by diversifying its markets beyond America. While exports to the U.S. plunged 27% in September compared to last year, China’s global exports reached a six-month high with 8.3% growth.
The electric vehicle sector has emerged as a particular bright spot, with exports doubling in September compared to the previous year. Domestically, passenger car sales increased by 11.2% year-on-year in September, though this represented a slowdown from the 15% growth recorded in August.
Diplomatic relations between Beijing and Washington remain tense. It remains uncertain whether Chinese President Xi Jinping and U.S. President Donald Trump will proceed with their proposed meeting during an upcoming regional summit later this month.
Against this backdrop of international friction, Xi and other Communist Party leaders convened a key political meeting on Monday to outline China’s economic and social policy objectives for the next five years. The timing is significant as China grapples with multiple domestic economic challenges.
One of the most pressing issues facing Chinese policymakers is the ongoing property sector crisis. Residential property sales fell 7.6% by value in the January-September period compared to last year. Ratings agency S&P projects nationwide new home sales will decline by 8% in 2025 and by an additional 6% to 7% in 2026.
The extended real estate downturn has significantly dampened consumer confidence and overall demand. Though industrial output increased by 6.5% year-on-year in September—the fastest pace since June—retail sales growth slowed to just 3%.
Chinese authorities have also been working to address excess capacity and price wars in various sectors, including the automotive industry, which contributed to the economic slowdown last quarter.
Financial markets responded positively to the economic data, with the Hang Seng index in Hong Kong rising 2.3% and the Shanghai Composite index climbing 0.5% on Monday. This suggests investors may have been bracing for even worse news.
A spokesman from the National Bureau of Statistics maintained that China has a “solid foundation” to achieve its full-year growth target, while acknowledging external complications such as trade frictions with the U.S. and rising protectionism globally.
Lynn Song, chief economist for Greater China at ING Bank, noted that China’s stronger economic performance in the first half of the year provides “some buffer” to help meet the annual target. However, there are concerning indicators pointing to persistent weaknesses.
Investment in fixed assets—factories, equipment, and similar capital expenditures—dropped 0.5% in the last quarter, underscoring the weakness in domestic demand. This sluggishness was further evident during China’s recent Golden Week holiday in October, which saw “mildly disappointing” spending patterns according to Morningstar analysts.
Economists widely expect China’s central bank to implement a rate cut before year-end to encourage greater spending and investment. Song suggested there’s “room for the government to do more,” particularly in supporting consumption and the property market as the effects of previous stimulus measures begin to fade.
Looking ahead, Jacqueline Rong, chief China economist at BNP Paribas, predicted further economic deceleration in 2026. She cited continuing declines in property investment and an expected moderation in the artificial intelligence boom that has recently helped lift China’s economy and stock market.
The World Bank currently projects China’s economy will grow at a 4.8% annual rate for the full year 2025.
Fact Checker
Verify the accuracy of this article using The Disinformation Commission analysis and real-time sources.
11 Comments
The slowdown in China’s economy could have broader implications for global commodity and energy markets. Worth keeping an eye on how this develops and impacts mining, metals, and energy sectors.
The 4.8% growth rate is still respectable, but a notable drop from prior quarters. Curious to see if this prompts any policy shifts from Beijing to try to prop up the economy.
Agreed, the government may need to take additional measures if the slowdown continues. Fiscal and monetary policy tweaks could be in the cards to boost domestic demand.
The trade tensions and weak domestic demand seem to be taking a toll on China’s economy. Wonder if they’ll be able to offset that through stronger export performance in key sectors like EVs.
Good point. The EV export growth is a positive sign, but they’ll likely need a broader recovery in both external and internal demand to get back to their recent growth rates.
Curious to see if this economic slowdown in China will impact global commodity and energy markets. The mining, metals, and energy sectors may need to brace for potential headwinds.
It’s interesting to see the divergence between China’s export performance and domestic demand. Suggests they may need to focus more on stimulating household consumption to drive sustainable growth.
Interesting to see China’s economy slowing amidst trade tensions and weak domestic demand. Wonder if the diversification of export markets will help offset the impact of lower US trade. The EV sector growth is a positive sign though.
Agreed, the EV exports are an encouraging sign. China will need to find ways to spur domestic consumption if it wants to maintain robust economic growth.
4.8% growth is still decent, but a noticeable deceleration from prior quarters. Curious to see if the government will take further measures to stimulate the economy and meet their annual target.
Agreed, the government may need to step in with more policy support if the slowdown persists. Curious to see how they balance managing trade tensions with boosting domestic demand.