China's economic expansion accelerated to 4.5% year-on-year in the third quarter, outperforming expectations following a sluggish summer. The performance exceeded the 4.4% expansion predicted by economists surveyed by Reuters and picked up from a three-year low of 4.3% recorded in the second quarter. Across the first nine months of the year, economic growth averaged 4.6%, remaining within Beijing's official target range of 4.5% to 5%.
The quarter's acceleration was heavily anchored by resilient external demand. Strong foreign orders for Chinese technological goods helped balance persistent headwinds across the domestic economy, pushing China's monthly trade surplus to a record peak of $133.5 billion. Economist Intelligence Unit senior economist Tianchen Xu observed that a rebound in September salvaged lukewarm activity from July and August, attributing the upturn to a strong external sector, government investment, and a comparatively weak baseline.
September data reflected mixed momentum across sectors. Industrial output expanded by 5.5% from a year earlier, aligning precisely with consensus projections. Domestic retail sales increased by 1.1%, surpassing the 0.6% forecast. Meanwhile, fixed asset investment in urban areas fell by 7.2% during the first nine months compared to the prior-year period, slightly better than the 7.3% decline estimated in the Reuters survey.
Despite export resilience, prolonged domestic challenges continue to weigh on the broader economy. Oxford Economics senior economist Sheana Yue noted that the extended housing downturn limits how much stronger industrial production benefits the wider domestic market, particularly as households face declining wealth tied up in real estate. How will global trade demand hold up if domestic consumer spending remains restrained?
