China reported a 4.5% year-on-year increase in gross domestic product for the third quarter, outpacing economists’ expectations and reducing pressure for further government stimulus. The performance marked an improvement from the previous quarter, as strong export demand helped counterbalance weak property and domestic consumption sectors.
The National Bureau of Statistics disclosed on Monday that China’s third-quarter GDP topped the 4.4% growth predicted by analysts in a Reuters survey, rebounding from the 4.3% rate seen in the prior quarter—the slowest in more than three years. From July to September, the economy expanded by 1.2% over the previous three months, surpassing projections and gaining momentum from the 0.9% increase recorded between April and June.
For the first nine months of 2026, GDP growth was 4.6%, keeping the economy within the government’s annual target range of 4.5% to 5.0%. Export strength remained a key driver, supplying growth even as domestic demand and private investment lagged, and as trade frictions with the European Union increased.
September data showed the trade surplus widened beyond expectations, driven by higher export volumes, and China appears set to exceed last year’s record surplus of $1.2 trillion. However, negotiations with the EU regarding hybrid vehicle exports could affect future auto shipments.
Authorities have rolled out broader support this year. Measures included expanding access to cheaper loans for infrastructure and technology projects, easing credit conditions for home buyers, increasing subsidies on loan interest for small private businesses and consumers, and deploying 550 billion yuan in unspent government debt quotas to assist local governments. An 800 billion yuan financing program was also tapped to boost infrastructure initiatives.
Despite these efforts, some sectors remained under pressure. Infrastructure investment fell 4.2%, while fixed-asset investment declined by 7.2% during January–September, an unchanged pace compared to the previous month. Property investment dropped 20.6% in the first nine months of 2026.
Retail sales improved slightly, growing 1.1% in September—the fastest rise since March—beating forecasts and up from August’s 0.4%. Industrial output climbed 5.5% year-on-year in September, matching analyst expectations and achieving its highest growth in six months. The urban unemployment rate was recorded at 5.2% for September.
Although stimulus was increased, authorities did not introduce large-scale interventions, relying instead on robust goods exports, especially in technology, to help meet annual growth objectives. Most economists expect the People’s Bank of China to maintain current benchmark lending rates for the remainder of the year, with fiscal policy taking the lead.
