The Chinese economy accelerates with growth of 4.5%

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China’s economic growth accelerated in the third quarter as rapid export growth, driven by the AI ​​boom, offset weak retail spending and investment.

GDP grew 4.5 percent in the three months to September from a year earlier, beating the 4.4 percent median forecast of analysts surveyed by Bloomberg. This follows growth of 4.3 percent over the previous three months, which was one of the lowest rates in years.

For the nine months of the year through September, growth was 4.6 percent, the National Bureau of Statistics reported on Monday, thanks to a higher rate in the first quarter. China’s official growth target for the full year is 4.5 to 5.0 percent.

“This will likely keep the growth target for the year on track,” said Lynn Song, chief economist for Greater China at ING.

Mao Shengyong, deputy director of the NBS, noted that although the third quarter growth rate was among China’s lowest in decades, outside of the Covid-19 pandemic it was one of the strongest among the world’s largest economies.

He said this happened despite a “complex and ever-changing” international environment and “insufficient domestic demand,” adding: “The foundations for stable and improving economic performance still need to be consolidated.” »

China’s leaders are grappling with a two-speed economy, with the AI ​​boom and investment in high-tech industries and manufacturing boosting exports, while a prolonged slowdown in the real estate sector has undermined domestic demand. Exports rose 36 percent last month in dollar terms from a year earlier.

But a rapidly growing trade surplus, which is on track to surpass last year’s record $1.2 trillion, has created friction with trading partners, particularly the EU.

Brussels and Beijing agreed this month to set a quota for imports of Chinese hybrid cars to the bloc, avoiding a full-scale trade conflict. But the EU should introduce other safeguard measures to protect manufacturing industries and jobs in the face of competition from low-cost Chinese rivals.

China’s industrial production continued to grow in September, increasing 5.5 percent from a year earlier, matching forecasts and exceeding August’s 5.2 percent growth.

Retail sales, seen as a gauge of consumption, rose 1.1 percent last month from a year earlier, up from 0.4 percent in August and beating analysts’ forecasts of 0.5 percent growth.

Chinese policymakers have pledged to do more to boost domestic demand, as the slowdown in the property sector, now in its fifth year, has weighed on household confidence.

ING’s Song said the stronger-than-expected retail sales were partly due to increased sales of “communication devices” such as phones and other devices for which the government offers a subsidy.

The property market, however, remained weak, with prices of new homes in 70 cities falling 0.14 percent in September from the previous month, excluding state-subsidized housing. This is a slight improvement from a 0.17 percent decline in August compared to July, according to NES figures.

“The key macroeconomic message is that China’s economy is still supply- and production-driven,” said Yuhan Zhang, senior economist at the Conference Board’s China Center.

“This supports short-term growth and industrial upgrading, while continued efforts to strengthen household consumption, demand for services and consumer confidence would make the recovery more balanced and sustainable,” he added.

Zhang said investment data showed China’s growth increasingly relied on what the government calls “new productive forces”, particularly advanced manufacturing.

“Equipment manufacturing and high-tech industries remain strong because strong central-level industrial policy support encourages investment in strategic sectors,” Zhang added.

Investment in fixed assets fell 7.2 percent year-on-year in the first nine months of 2026, matching a 7.2 percent decline in August, but slightly sharper than analysts’ median forecast of a 7.3 percent decline.