China’s economy expanded faster than expected in the third quarter, giving Beijing additional room to avoid aggressive stimulus even as weakness in consumption, investment and property continues to complicate the recovery.
Gross domestic product increased 4.5% from a year earlier in the third quarter, accelerating from 4.3% in the second quarter. On a quarter-over-quarter basis, GDP rose 1.2%. Growth for the first nine months reached 4.6%, according to China’s National Bureau of Statistics.
September industrial production rose 5.5% from a year earlier, while retail sales increased only 1.1%. The divergence reinforces the central imbalance in China’s economy: manufacturing and exports remain relatively strong, while household demand and investment remain much weaker.
Fixed-asset investment continued to contract, while the property sector remains a significant drag. China’s expansion is therefore increasingly dependent on industrial production, technology manufacturing and overseas demand rather than a broad domestic recovery.
For global markets, the stronger headline GDP figure reduces immediate pressure on Beijing to deliver a large stimulus package. It also supports demand expectations across commodities, industrial companies and Asian exporters.
But the composition of growth matters as much as the headline number.
If household spending and private investment remain weak while exports continue carrying the economy, trade tensions with Europe and other major markets could intensify.
The next test will be whether policy support can generate stronger domestic demand without further increasing China’s reliance on manufacturing and exports.
