China’s economic growth falls below 5% as domestic demand weakens

Beijing convenes key economic meeting

The figures came just hours before the opening of a major four-day Communist Party meeting in Beijing, where top officials are expected to outline long-term economic strategies.

The slowdown also precedes planned talks between Chinese and U.S. trade officials, with a possible meeting between Presidents Donald Trump and Xi Jinping later this month.

Earlier in October, Trump threatened to impose 100% tariffs on Chinese imports starting November 1, citing Beijing’s restrictions on rare earth exports — a move that has heightened fears of renewed trade friction.

Growth and investment under pressure

The National Bureau of Statistics (NBS) reported that GDP growth from July to September slipped from 5.2% in the previous quarter, matching analysts’ expectations but reflecting a cooling economy.

Investment in fixed assets fell by 0.5% year-on-year during the first three quarters, primarily due to a deepening slump in the real estate sector.

Economist Zhiwei Zhang of Pinpoint Asset Management described the contraction as “rare and alarming,” though he noted that recent stimulus measures could help ease pressure in the final quarter.

Persistent consumer slump

Domestic spending continues to lag behind pre-pandemic levels.

Retail sales growth in September rose only 3% year-on-year, marking the slowest pace since November and falling short of the momentum seen earlier this year.

“This slowdown reflects the fading effect of the consumer goods trade-in scheme,” said Julian Evans-Pritchard of Capital Economics, adding that China’s reliance on exports to offset weak consumption “is not sustainable.”

Public sentiment and real estate challenges

Residents in Beijing expressed concerns over the economic outlook.

Alin, a 40-year-old administrative assistant, said that “current consumer subsidies are not quite enough” to boost confidence, citing worries about job security, property prices, and education costs.

Meanwhile, the property market remains a drag on recovery.

Home prices fell year-on-year in 61 of 70 cities surveyed by the NBS, highlighting ongoing caution among homebuyers and developers alike.

Industrial output offers a silver lining

Amid the gloom, industrial production provided a rare bright spot, rising 6.5% in September, well above the 5% forecast.

In its statement, the NBS said the economy had “withstood pressure and maintained steady progress,” despite headwinds in trade and consumption.

Over the weekend, Beijing and Washington agreed to resume trade discussions, aiming to ease tensions and avert another costly tariff standoff.

Trump later told Fox News that imposing blanket tariffs on Chinese goods would be “not sustainable,” suggesting room for negotiation.

Outlook

All eyes are now on the outcome of the Communist Party’s four-day meeting, which concludes Thursday, as policymakers seek to stabilize growth and shift toward a more consumption-driven economy amid a complex global landscape.