(Bloomberg) — China said the economy is still on track to reach this year’s expansion target even after reporting the weakest growth pace in a year, with a boost from booming exports buffering a broad slowdown.
Gross domestic product expanded 4.8% from a year earlier in the three months through September, slightly exceeding economists’ forecast. The growth in the first three quarters laid a “solid foundation” for achieving the full-year growth goal of around 5%, the National Bureau of Statistics said in a Monday statement.
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The latest official snapshot of the economy marks the start of a high-stakes week for China, as top leaders gather in Beijing at the so-called fourth plenum to hash out development plans for the next five years.
And after tensions with the US erupted anew over trade, Treasury Secretary Scott Bessent is set to meet Chinese Vice Premier He Lifeng in Malaysia this week to prepare for talks between the two countries’ presidents later in October. US President Donald Trump on Sunday listed rare earths, fentanyl and soybeans as the US’s top issues.
Coupled with fresh fiscal support announced last week, the 5.2% growth rate for the first three quarters may reduce the urgency for further stimulus in the coming weeks. Ding Shuang, chief economist for greater China and north Asia at Standard Chartered Plc., said policymakers may delay a 10-basis-point rate cut the bank forecast for this year.
What Bloomberg Economics Says…
“The data reduce the need for fresh stimulus in Q4, but policymakers will likely focus more on addressing the structural disconnect between supply and demand, especially as they deliberate the 15th Five-Year Plan during the ongoing Fourth Plenum.”
— Chang Shu and David Qu
Still, the Monday data gave policymakers plenty of reasons not to be complacent. Retail sales grew at the slowest pace since November, while fixed-asset investment made its first year-to-date contraction since 2020.
This weakness was offset by an unexpected uptick in industrial output, which expanded 6.5% in September and exceeded all economists’ estimates.
“The bottom line here is that the growth is slowing down, but with huge divergence,” said Ning Zhang, senior China economist at UBS Group AG, on Bloomberg TV.
China stocks continued their advance after the data was released, with the benchmark CSI 300 Index up as much as 1.3% following a broader risk-on mood in the region as Trump signaled easing tensions with China. A gauge of Chinese stocks in Hong Kong traded 2.5% higher as of midday break.
