China’s Q3 growth quickens to 4.5% as exports carry economy

China’s economy grew 4.5 per cent year over year in the third quarter, up from 4.3 per cent in the spring, as exports carried growth while consumer spending and investment stayed weak, the National Bureau of Statistics said Oct. 19, 2026.

The result beat the 4.4 per cent forecast in a Reuters poll and puts growth for the first nine months at 4.6 per cent, inside Beijing’s 2026 target range of 4.5 to 5 per cent. The second-quarter pace was the slowest in more than three years.

On a quarterly basis, the economy expanded 1.2 per cent, compared with 0.9 per cent in the second quarter and a forecast of 1.1 per cent, according to figures reported by KELO and the Business Standard of Bangladesh. The bureau’s own release covers the first three quarters.

Industrial output rose 5.5 per cent in September from a year earlier, up from 5.2 per cent in August. Retail sales rose 1.1 per cent, above the 0.6 per cent forecast and up from 0.4 per cent in August, the fastest pace since March.

The weak side of the ledger was investment. Fixed-asset investment fell 7.2 per cent in the first nine months of the year, and property investment fell 20.6 per cent, a steeper decline than the 19.9 per cent recorded through August. Infrastructure investment shrank 4.2 per cent, the Business Standard reported.

Zhiwei Zhang, chief economist at Pinpoint Asset Management, said “the economic momentum remained subdued in September.” He added that “after adjusting for inflation, real retail sales barely grew compared to a year ago.”

Raymond Yeung, chief China economist at ANZ, kept his 2026 growth forecast at 4.6 per cent but said risks “remain tilted to the downside.” He cited “weak domestic demand, persistent deflationary pressure and an ongoing property downturn.”

Yuhan Zhang, principal economist at The Conference Board’s China Center, said “China’s economy is still supply- and production-side driven,” and that stronger household consumption and confidence would make the recovery more balanced.

Mao Shengyong, deputy head of the statistics bureau, said new growth drivers, including high-end manufacturing, the digital economy and modern services, contributed more than 40 per cent of growth in the first three quarters.

Exports remain the main support. China’s trade surplus widened more than expected in September, and it is on track to top last year’s record of roughly US$1.2 trillion, the Business Standard reported. As we reported Oct. 14, September exports jumped 36.3 per cent and the monthly surplus hit US$133.5 billion.

That reliance is drawing pushback abroad. The European Union has said a planned deal with Beijing could halve hybrid car exports to the bloc, and reports on the data flagged that curbs on Chinese vehicles could hit a key export industry.

Beijing has so far avoided broad stimulus. The Business Standard reported it freed 550 billion yuan (about US$82 billion) in unused government debt quotas and tapped an 800 billion yuan policy-based financing tool for infrastructure, while expanding loan interest subsidies for small private firms and consumers. The central bank has held its policy rate since a cut in May 2025.

Ho Woei Chen, an economist at UOB, said “external demand is still keeping the economy afloat” and that broad-based easing is unlikely for now. Andy Ji, an Asian currency and rates analyst at ITC Markets, said the result puts the full-year target within reach but still requires a strong fourth quarter.

The fourth-quarter figures will show whether exports can keep carrying the economy. China is a major trading partner for Canada, so shifts in Chinese demand and in global trade flows are watched by Canadian exporters, though the bureau’s release does not address Canada directly.

Via KELO, the Business Standard and Quartz.

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