China's GDP rebounds to beat expectations

Oct 19, 2026

China's economic growth rebounded to 4.5 percent year on year in the third quarter, beating expectations and easing the pressure on policymakers for delivering more aggressive stimulus measures to meet the annual target. The gross domestic product growth rate, released by the National Bureau of Statistics on Monday, beat the forecast for 4.4 percent growth in a poll and was an improvement from the more-than-three-year low of 4.3 percent in the April-to-June period. The world's second-largest economy generated about 107.11 trillion yuan in output in the first three quarters. Beijing has leaned heavily on exports for growth this year, but that engine faces growing pressure as domestic demand remains weak and trade tensions with the European Union escalate. China's strategy of redirecting credit and resources from property towards high-tech industries has created a two-speed economy, where strong factory output and exports mask weak consumption and private investment. For January-September, the economy grew 4.6 percent, within the range of the government's annual growth target of 4.5 to five percent. On a quarterly basis, the economy expanded 1.2 percent in the third quarter, surpassing expectations for a 1.1 percent rise and accelerating from 0.9 percent in April-June. The trade surplus widened more than expected in September as exports surged, keeping the country on track to surpass last year's record surplus of US$1.2 trillion and likely intensifying trade tensions with major partners. A deal with the EU to rein in Chinese hybrid-vehicle shipments could weigh on the booming auto trade. Beijing has recently expanded support for home buyers, unveiled measures to steer cheaper credit into sectors such as infrastructure and technology and allocated 550 billion yuan in unused government debt quotas to ease local governments' financial strain and expand infrastructure investment. Authorities also stepped up fiscal support, including expanding loan interest subsidies for small private firms and consumers and tapping an 800 billion yuan policy-based financing tool to spur infrastructure investment. Still, infrastructure investment shrank 4.2 percent. Fixed-asset investment declined 7.2 percent in the first nine months, dropping at the same pace as in January-to-August period. Retail sales grew 1.1 percent in September, though, improving from the 0.4 percent rise in August and compared with an expected 0.6 percent rise. It marked the quickest growth since March. For the first three quarters, total retail sales of goods and services, a major indicator of the country's consumption strength, increased by 2.6 percent. Property investment fell 20.6 percent during the period. Policymakers refrained from releasing large-scale stimulus measures, as strong goods exports, aided by a global AI-fuelled tech boom, should help the country reach its annual growth target. Industrial output expanded 5.5 percent in September, accelerating from the 5.2 percent growth in August and was in line with expectations. It marked the quickest growth in six months. For the first three quarters, value-added industrial output increased by 5.3 percent. (Xinhua/Reuters) Edited by Tony Sabine

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