China maintained its growth momentum in the third quarter, with a year-on-year increase of 4,8% of GDP which is in line with expectations and confirms the moderation compared to the second quarter. The data comes in an environment of weak domestic demand and greater external uncertainty, but keeps the economy close to the official target of 5%, according to data on economic growth.
In quarterly terms, the activity also progressed by 1,1%, the same pace as between April and June. In the cumulative total for the first nine months, growth stands at 5,2%, a pace that, barring a setback at the end of the year, leaves Beijing with a chance of meeting its objective.
What the quarterly figures reflect
The National Statistics Office (ONE) highlighted that the economy “continued to advance despite the pressures”, with expanding production and supply and stability in employment and pricesThe 4,8% growth represents a slowdown compared to the 5,2% of the second quarter and the 5,4% of the first, according to analysis by what happened to China.
By branches of activity, in January-September the services sector led with a 5,4%, the industry advanced a 4,9% and the primary one 3,8%In the first half of the year, GDP had increased by 5,3%, confirming a slight loss of traction in the third quarter.
Official estimates put the size of the economy in the first three quarters at about 101,5 trillion yuan, in line with the year-on-year increase of 5,2% for the period.
Strong industry, cooler consumption and housing
The September indicators show a two-speed economy: Industrial production rebounded to 6,5% year-on-year (three-month high), but retail sales cooled to 3,0%, minimum of ten months.
The real estate adjustment continues to weigh heavily. New home prices fell at the fastest rate in eleven months, while investment in the sector contracted by 13,9% year-on-year in the first three quarters.
Outside of brick, the investment in fixed assets accumulated between January and September fell by 0,5%, which suggests room to accelerate infrastructure projects if the situation requires it.
Foreign dependence and trade tensions
Given the weakness in consumption, growth is increasingly relying on external demand. Sales to the United States They descended a 27% year-on-year the last month observed, while shipments to the European Union rose by 14%, Southeast Asia 15,6% already Africa 56,4%.
This pattern helps sustain industrial activity, but several analysts warn of imbalances if household consumption is not strengthened. Competing on price abroad, they point out, can compress margins and transfer pressure to the labor market.
Annual objective and policy stance
The ONE stresses that the economy still faces “multiple risks and challenges", from external instability to the aftermath of the real estate adjustment. However, third-quarter growth is consistent with achieve the goal of “around 5%”.
For Lynn Song (ING), the data keeps China “on track” towards the annual target, which could reduce the urgency of immediate measures. From Oxford Economics, Sheana Yue predicts selective support for the remainder of the year to avoid a deeper slump, while authorities they store ammunition for later.
In parallel, the reform agenda and the next five-year plan put the focus on industrial modernization and technological self-sufficiency, which can open opportunities to enter Asian marketsIn the short term, one option on the table would be accelerate infrastructure if the fourth quarter deviates from the script.
With 4,8% year-on-year and 1,1% quarter-on-quarter, China is on a softer growth path that's still consistent with its annual target: Industry on the rise, consumption weak, and housing on the decline, a delicate balance that will require careful policy to consolidate the recovery without reversing the stability achieved.
