China’s economic engine is showing signs of slowing down, with its latest quarterly growth figures revealing a deceleration attributed to escalating trade tensions with the United States. In the three months leading up to September, the world’s second-largest economy expanded by 4.8%, marking its most sluggish performance in a year. This data emerges just as China’s top leaders are set to convene and chart the nation’s economic course for the next five years (2026-2030), with this recent growth data likely to shape the discussion.
The third quarter’s 4.8% growth represents a dip from the 5.2% recorded in the preceding quarter. Official figures from China’s National Bureau of Statistics highlighted the economy’s resilience and vitality despite ongoing pressures, pointing to the technology and business services sectors as key contributors to this growth.
Having set an annual growth target of “around 5%,” China has managed to avoid a significant downturn, supported by governmental stimulus measures. However, the recent imposition of controls on rare earth exports, critical for global electronics manufacturing, has intensified trade friction with the US. In response, US President Donald Trump has signaled the possibility of imposing an additional 100% tariff on Chinese imports.
Amidst these developments, US Treasury Secretary Scott Bessent is scheduled to meet with Chinese officials in Malaysia this week, aiming to de-escalate tensions and potentially pave the way for a summit between President Trump and President Xi Jinping.
Prior to this recent escalation, a trade truce had allowed Chinese businesses to boost exports to the US, leading to an 8.4% increase in September. China’s industrial output also saw a notable rise of 6.5% last month, with sectors like 3D printing, robotics, and electric vehicles demonstrating strong performance. The services sector, encompassing IT, consulting, and logistics, has also shown positive growth.