China GDP rises slightly more than expected in Q3, but at slowest pace in a year

Updates with market reax, analyst comments 

Investing.com-- China’s economy grew slightly more than expected in the third quarter of 2025, but at its slowest pace in a year amid persistent headwinds from rampant disinflation and U.S. trade tensions. 

Gross domestic product grew 4.8% year-on-year in the three months to September 30, government data showed on Monday. The print was slightly above expectations of 4.7% but slowed from the 5.2% rise seen in the prior quarter.

Y-o-Y GDP growth was also at its slowest since Q3 2024. 

GDP grew 1.1% quarter-on-quarter, above expectations of 0.8%. 

The third quarter reading brought China’s year-to-date GDP to 5.2%, down slightly from the 5.3% seen in the prior quarter but still above Beijing’s 5% annual target. 

Exports and manufacturing remained the biggest drivers of growth, while consumer spending and private investment cooled further. Beijing had doled out a slew of stimulus measures to support growth in recent quarters, although support from these measures was seen cooling in recent months. 

Thursday’s data highlighted that some facets of the Chinese economy, especially its massive export industry, remained strong and continued to underpin growth. But persistent deflation, weak private investment and a prolonged property market downturn all detracted from growth.

China also faces renewed trade tensions with the U.S., after President Donald Trump earlier in October threatened to impose 100% tariffs against the country. Talks between Beijing and Washington are set to continue in the coming weeks. 

Other data showed the Chinese economy picking up some pace in September. Industrial production and retail sales grew more than expected last month, while China’s unemployment rate also unexpectedly fell to 5.2% from 5.3%.

But fixed asset investment– a gauge of business spending– unexpectedly shrank 0.5%, logging its first monthly contraction since the COVID-19 pandemic in 2020.

Chinese markets reacted positively to the data. The Shanghai Shenzhen CSI 300 stock index rose nearly 1%, while the yuan firmed slightly. 

GDP shows some resilience, but future growth depends on stimulus- analysts 

Analysts noted that while the Chinese economy did show some resilience on strong exports, sustained growth will likely be possible only through more stimulus and investment support

ANZ analysts noted that GDP remained on track to meet Beijing’s 5% annual target in 2025, but noted that cyclical growth still remained "reliant on debt-financed expansion." 

"Any adjustment to cyclical policy stance is anticipated to take place around the period of December’s Central Economic Work Conference," ANZ analysts said, adding that any further signs of deterioration were likely to invite more monetary policy easing by the end of the year. 

Capital Economics analysts warned that Chinese GDP data may be overstating resilience in growth, and that weak local demand remained a major drag. 

They also warned that Chinese growth was becoming increasingly dependent on exports, which was not sustainable, and that growth was at risk of slowing further in the medium-term unless "authorities take much more proactive steps to support consumer spending."