China’s gross domestic product grew 4.5 percent in the third quarter from a year earlier, the National Bureau of Statistics said on Monday, quickening from 4.3 percent in the second quarter after growth of 5.0 percent in the first. The quarterly gain was 1.2 percent, up from 0.9 percent in the second quarter. Output for the first nine months of the year reached 107,107.1 billion yuan, up 4.6 percent at constant prices.
The result beat expectations modestly. Economists polled by Reuters had forecast 4.4 percent annual growth and a 1.1 percent quarterly rise, and the same poll put full-year growth at 4.5 percent, the bottom of Beijing’s target range of 4.5 to 5.0 percent. The third quarter reading lifts the nine-month pace to 4.6 percent, which keeps the target in reach without a large stimulus package and takes growth off the more than three-year low recorded in the second quarter.
The composition remains two-speed. Services value added rose 5.2 percent over the first nine months, against 3.8 percent for industry and 3.7 percent for agriculture. Industrial output from enterprises above designated size rose 5.5 percent in September from a year earlier, the fastest in six months, with equipment manufacturing up 10.2 percent and high-tech manufacturing up 14.3 percent over the nine months. Production of lithium-ion batteries rose 39.5 percent and industrial robots 29.1 percent.
Trade is carrying the expansion. Total goods trade rose 18.8 percent in the first nine months, with exports up 16.4 percent and imports up 22.3 percent, and September exports jumped 29.6 percent in yuan terms. Reuters reported that the September trade surplus widened more than expected, keeping China on track to pass last year’s record surplus of 1.2 trillion dollars, a trajectory likely to intensify friction with major partners, including the European Union.
Domestic demand is the weak side of the release, and the bureau said so itself, noting that insufficient domestic demand remains a prominent issue. Retail sales rose 1.1 percent in September, better than the 0.6 percent rise economists expected and the quickest since March, but still slight. Fixed-asset investment fell 7.2 percent in the first nine months, infrastructure investment fell 4.2 percent, and private investment fell 10.4 percent. Real estate development investment fell 20.6 percent, and the floor space of new commercial buildings sold fell 13.2 percent. The surveyed urban unemployment rate eased to 5.2 percent in September, and consumer prices rose 0.9 percent while factory-gate prices rose 5.0 percent, a reflation in industrial prices that has not reached households.
Policy support so far has been targeted rather than sweeping. Reuters reported that Beijing has expanded support for home buyers, steered cheaper credit into infrastructure and technology, allocated 550 billion yuan in unused government debt quotas to ease local government finances, and tapped an 800 billion yuan policy financing tool for infrastructure. Policymakers have refrained from large-scale stimulus, judging that strong goods exports, aided by the global artificial intelligence investment boom, should carry the economy to its annual target.
The Australian dollar, the usual market proxy for Chinese demand, rose after the release, trading 0.36 percent higher at 0.6971 against the US dollar, FXStreet reported. The risk in the print is concentration: growth now depends on export markets absorbing a rising Chinese surplus and on high-tech manufacturing, while the property contraction and falling private investment continue to subtract from domestic momentum.