China's gross domestic product (GDP) growth slowed for the second straight quarter to the lowest rate in a year. Key indicators such as retail sales, fixed assets investment, and dwelling prices also posted weak results. However, industrial production growth beat expectations, providing some cushioning. As the Communist Party has begun discussions on the 15th five-year plan (2026–2030), attention is focused on whether additional stimulus measures will be announced.
China's National Bureau of Statistics (NBS) said on the 20th that third-quarter GDP grew 4.8% from a year earlier. This marked a slowdown for the second consecutive quarter, falling below 5% for the first time this year to the lowest level in a year. It was slightly above the market consensus compiled by Bloomberg (4.7% growth) and in line with the estimate compiled by Reuters.
The National Bureau of Statistics said at a press briefing, "This is due to a combination of factors such as heightened external uncertainty and increased restructuring pressure," adding, "This is 'growing pains' in the transition process and a natural phenomenon in the course of development." It also said, "A growth rate of 4.8% is still high compared with major countries, and the third-quarter GDP aggregates exceed the annual GDP of countries ranked around third in the world."
The retail sales growth rate in September slowed to 3% from August's 3.4% increase. It was the lowest in 10 months and matched Reuters' forecast.
Fixed assets investment in the first to third quarters fell 0.5% from a year earlier, below the 0.1% growth expected in a Reuters poll. It was also the first decline since 2020, with real estate investment dropping 13.9%, deepening the fall. The year-over-year growth rate of real estate investment for January–August was -12.9%. Zhiwei Zhang, president of Pinpoint Asset Management, said in a report that "a decline in fixed assets investment is rare and concerning."
Dwelling prices also fell sharply in September. New dwelling prices dropped 0.41% from the previous month, the steepest decline in 11 months. Existing dwelling prices fell 0.64%, the biggest drop in a year.
While domestic economic indicators broadly weakened, exports and industrial production beat expectations. The aggregates of merchandise exports for the first to third quarters rose 7.1% from a year earlier. In addition, industrial production in September increased 6.5% from a year earlier. It topped the market expectation of a 5% increase and was slightly higher than the 5.2% growth in August.
Ning Zhang, UBS Group's chief China economist, told Bloomberg, "The key point is that the gaps among economic indicators are very large. Exports and industrial production beat expectations, but the domestic economy, including retail sales and investment, is all slowing." Zhang added, "Economic growth in the fourth quarter is expected to be more difficult," and said, "Because the goal of 5% annual growth could be at risk, the Chinese government may need to prepare new stimulus to offset this."
The National Bureau of Statistics, on the feasibility of achieving the growth target, said, "With 5.2% growth in the first to third quarters, the foundation for the annual target has been laid," adding, "Growth engines are being replaced by the rapid growth of industries such as artificial intelligence (AI), and the effects of proactive fiscal and monetary policies are accumulating. Indicators related to manufacturing, domestic demand, and tourism and consumption are all showing a recovery trend, so, in conclusion, the annual growth target is fully achievable."