China economy grows 4.5 percent, beating forecasts as exports surge

Growth picks up in third quarter

Gross domestic product rose 4.5 percent from a year earlier in the July-September period, figures released Monday by the National Bureau of Statistics showed. The pace increased from 4.3 percent in the second quarter and exceeded most analysts’ expectations.

For the first nine months of the year, GDP grew 4.6 percent year on year, according to preliminary figures. China’s ruling Communist Party has set a growth target of 4.5 to 5 percent for 2026, a range that would represent one of the slowest expansions in decades outside the COVID-19 pandemic.

Exports lead while demand lags

Exports rose by more than 16 percent in the first three quarters, reaching 23.19 billion yuan ($3.47bn), official data showed. Strong demand for semiconductors and other technology-related goods supported the increase during the AI boom.

The broader economy faces weaker domestic demand and a sagging property market. Retail sales rose 1.1 percent year on year in September and 2.6 percent over the first nine months of 2026.

Industry rises, investment retreats

Industrial production, covering sectors including manufacturing and mining, increased 5.5 percent in September. Growth for the first three quarters reached 5.3 percent. Fixed-asset investment, including spending on real estate, factories and machinery, edged up 0.7 percent last month. However, it contracted 7.2 percent from January through September.

Professor warns of export reliance

Zhiguo He, a finance professor at Stanford University’s Graduate School of Business who studies China’s economy, said the country was on track to meet official targets. He said Beijing would be cautious about continued dependence on export-led growth. On housing, He said real estate was still shrinking, adding that Chinese households had been adjusting their expectations.