China’s Economy Grows at Slowest Pace in a Year

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China’s economy grew at its slowest quarterly pace in a year during the July–eptember period, as a persistent decline in the housing market and trade tensions hurt demand.

China’s economy expanded by 4.8 percent in the third quarter from the same period last year, according to data released by the National Bureau of Statistics on Oct. 20.

The performance was in line with economists’ expectations, but it represents a slowdown from the growth of 5.4 percent and 5.2 percent recorded in the first two quarters of the year, respectively.

A spokesperson for the National Bureau of Statistics pointed to “a complex and severe external environment” and economic restructuring pressures as key factors behind the slowdown. Still, the spokesperson struck a confident tone, adding that “there are still many favorable conditions to achieve the annual growth target.”

Despite Beijing’s optimism, some economists remain skeptical about the veracity of the official data.

“The fixed asset investment growth turned negative year-to-date, which is rare and alarming,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.

Data released on Oct. 20 show that property investment fell by 13.9 percent year over year in the first three quarters, worsening from a 12.9 percent drop recorded in the first eight months of the year.

Meanwhile, new home prices fell at their fastest pace in 11 months in September, falling 0.4 percent from the previous month.

“If the value of real estate, especially in first-tier cities, continues to shrink, people will feel they have less money to spend and will expect even less in the future,” said Hannah Liu, China economist at Nomura.

China said that retail sales, a measure of consumer spending, grew by 3 percent in September from a year earlier, down from August’s 3.4 percent gain and the slowest pace since November 2024.

In contrast, industrial production beat analysts’ expectations and recorded a 6.5 percent year-over-year increase in September, higher than the 5.2 percent gain in August, according to official data.

“September data shows the underlying economic structure remains unchanged,” said Li Hao, research director at Cypress Investment Management. “Domestic demand is still weak, with investment and consumption falling short of forecasts,” while strong exports suggest “front-loading of overseas orders is still driving factory activity.”

Data released last week showed that China’s export growth hit a six-month high in September, despite a double-digit decline in shipments to the United States.

Evans-Pritchard warned of further growth slowdowns unless Beijing changes its growth model.

“China’s growth is becoming increasingly dependent on exports, which are offsetting a slowdown in domestic demand,” he stated.

“This pattern of development is not sustainable, and so growth is at risk of slowing further over the medium-term unless the authorities take much more proactive steps to support consumer spending.”