Exports drive faster quarterly growth
China’s economy expanded 4.5% from a year earlier during the July-September quarter, supported by robust exports. Growth accelerated from 4.3% in the previous quarter, which was the slowest pace in more than three years.
During the first nine months of 2026, the economy grew 4.6%. Beijing is targeting annual growth of 4.5% to 5%, below last year’s 5% expansion. The International Monetary Fund recently lowered its 2026 forecast to 4.5%.
Domestic weakness limits broader gains
Despite stronger trade, domestic demand remains weak after a yearslong property market downturn. Analysts said the headline growth rate hides widening differences across industries, regions and households.
China’s statistics agency also warned that insufficient demand remains a significant problem. Officials said the economy still needs a stronger foundation for stable improvement amid a complex international environment.
Meanwhile, exports rose 36% last month, and China’s trade surplus reached $938 billion between January and September. The country is on track to exceed last year’s record surplus of $1.2 trillion.
Higher U.S. tariffs have pushed Chinese exporters toward Southeast Asia, Latin America and Europe. Semiconductors, automobiles, hybrid vehicles and electric vehicles are among the products supporting this growth.
Trading partners press China to rebalance
Large manufacturing capacity and weak consumption have sent more subsidized Chinese products into overseas markets at competitive prices. However, this technology-focused export model has produced limited job creation and broad income gains.
The European Union is seeking to reduce its trade imbalance with China, which exceeds $1.1 billion each day. Chinese exports to the bloc increased 16% during the first nine months of the year.
This month, the EU and China agreed to roughly halve Chinese hybrid vehicle imports over the next several years. Even so, economists expect continued protectionism and pressure from countries seeking to defend industries and employment.
China’s central bank rejects claims that an undervalued yuan drives the surplus. Governor Pan Gongsheng said China does not seek a large surplus and remains committed to expanding domestic demand.
References
Chan, H.-H. (2026, October 19). China’s economy accelerated in the July-September quarter on robust exports. AP News. https://apnews.com/article/china-economy-71354a055a412ef13e4e2edad070b4a5