China’s economy grows at slowest pace in a year as trade war bites
Official data put the annual growth rate at 4.8 percent, a sobering number for Chinese Communist Party leaders as they begin an important planning meeting.
China’s economy grew at its slowest pace in a year during the three months to the end of September, underscoring the difficulties Beijing faces as it tries to fight its corner in a global trade war at the same time as bolstering the domestic economy.
The sobering figures were released as top policymakers convened in Beijing to set the national agenda for the next five years, and as Chinese leader Xi Jinping prepares to meet President Donald Trump next week, their first face-to-face talks since the latter returned to the White House in January.
Gross domestic product expanded 4.8 percent in the third quarter compared to the same period last year, decelerating from the 5.2 percent recorded in the previous quarter, according to official statistics released Monday.
The real growth rate was likely even weaker, said Julian Evans-Pritchard, head of China research at Capital Economics, a consultancy.
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“The big picture is that growth is just about holding up, but probably at lower level that the GDP figures claim,” Evans-Pritchard wrote in a note. “What’s more, China’s growth is becoming increasingly dependent on exports, which are offsetting a slowdown in domestic demand. This pattern of development is not sustainable,” he said.
Exports have been the bright spot in China’s economy — even in the midst of heightened trade tensions, with an increase in sales to other parts of the world offsetting a big drop in goods being sent to the United States amid the trade war — but domestic demand has remained stubbornly weak.
Beijing, which has set a growth target of “about 5 percent” for the year as a whole, said the economy remained on track, but implied that the United States was to blame for upsetting the global trading system.
“A certain country’s abuse of tariff measures has impacted the order of global trade and economics since the beginning of the third quarter,” China’s National Bureau of Statistics said in a news release about Monday’s economic data. “With rife unilateralism and protectionism, a growing instability and uncertainty is weighing on international trade growth, further complicating the external environment,” the unnamed spokesperson said.
While industrial output grew 6.5 percent in September year-on-year, up from 5.2 percent in August, property investment plummeted by nearly 14 percent in the first three quarters of the year — emphasizing how the housing market continues to act as a drag on growth and consumer confidence in China.
Monday’s data underscores the economic and geopolitical challenges Beijing faces as it crafts its next five year plan at a Communist Party meeting called the fourth plenum.
The closed-door plenum — which is expected to run through Thursday and include Xi as well as more than 300 high-ranking Communist Party officials — will develop set national priorities for 2026 to 2030. Many analysts expect the meeting to focus on economic security and high tech development, including in cutting edge sectors like artificial intelligence and robotics, as well as measures to boost consumption.
The plenum is likely to maintain Beijing’s laser focus on “industrial self-reliance” in a bid to bolster China’s “national security in an indefinite era of confrontation and uncertainty,” wrote Neil Thomas, a politics expert at the Asia Society Policy Institute’s Center for China Analysis.
“The central message this time is continuity,” Thomas wrote. “Xi is not rewriting his playbook — he is doubling down. Expect more state-guided innovation, more money for frontier tech, and more support to keep the industrial machine humming.”
Personnel changes in recent days have added to the uncertainty going into the plenum.
Chinese state news agency Xinhua said Monday that a top trade official, Li Chenggang, was removed from his post as permanent representative to the World Trade Organization. Li, who will remain in his role as lead international trade negotiator, was accused last week by U.S. Treasury Secretary Scott Bessent of being “very disrespectful.”
On Friday, China’s Ministry of National Defense said that nine senior military officials, including China’s No. 2 general, He Weidong, had been expelled from the Communist Party because of corruption charges.
Yet, Chinese state media has trumpeted upbeat messages about the meeting.
Although “unilateralism and protectionism are surging” and “geopolitical rifts are deepening,” the Global Times wrote on Monday, China is “sending a strong signal of confidence to the world” with its five-year plan. A People’s Daily commentary about the plenum declared that by sticking to modernization and economic development, “The future will surely belong to us! Victory will surely belong to us!”
Trump also seems keen to project confidence as he prepares to meet Xi on the sidelines of the Asia-Pacific Economic Cooperation forum in South Korea next week. Trump told reporters on Air Force One Sunday night that he could lower tariffs on China, but Beijing has to “do things for us too.”
Trump also expressed optimism Sunday about a potential deal on Chinese purchases of U.S. soybeans, which Beijing has been boycotting in retaliation for the tariff storm. China imported no soybeans from U.S. farmers in September, for the first time since November 2018, data from China’s General Administration of Customs showed on Monday.
After China significantly tightened export controls on rare earths and the products that they go into earlier this month, Trump threatened to impose an additional 100 percent duty on Chinese goods on Nov. 1 or sooner, “depending on any further actions or changes taken by China.”
Bessent is scheduled to meet his Chinese counterpart, Vice Premier He Lifeng, in Malaysia this week. The two men held a video call on Saturday, which Xinhua described as “candid, in-depth, and constructive.”
