China GDP grows 4.5% in July-September as demand stays weak

Weak consumer demand, investment dip drag China's economy

New Delhi, Oct 19

An AI-fuelled export boom of China is covering up the impact of a real estate crisis and weak consumer sentiment, the report from France 24 said.

Gross domestic product expanded 4.5 per cent year‑on‑year in July‑September up from 4.3 per cent in the previous quarter, according to data from the National Bureau of Statistics (NBS). Beijing has set an annual growth target of 4.5‑5 per cent, its lowest goal in decades.

NBS deputy head Mao Shengyong described the international context as "complex and volatile", adding that domestic demand was "insufficient".

The government in late September rolled out mortgage subsidies for certain home purchases and infrastructure support to shore up activity as consumer spending and investment flagged.

Though retail sales rose 1.1 per cent last month, the report cited an analyst saying economic momentum remained "subdued" in September because real retail sales barely grew on an annual basis after adjusting for inflation.

Better-than-expected GDP numbers could discourage the government from implementing "significant" policy shifts in the fourth quarter to achieve annual targets.

Industrial production grew 5.5 per cent year-on-year in September, up from 5.2 per cent the previous month as it was "helped by strong foreign demand", another expert said.

"Fixed-asset investment dipped 7.2 percent during the first nine months of the year," the report said, adding that "China, the world's largest importer of crude, is under pressure from the high cost of energy caused by the Iran war, which has stymied shipping from the oil-rich Gulf."

The International Monetary Fund in the previous week downgraded its projection for China's 2026 growth to 4.5 percent due to the impact of higher energy prices, "protracted uncertainty and structural headwinds".

— IANS