China's economic growth accelerated to 4.5% in the July-September quarter, fueled by strong exports despite persistent domestic weakness and property market challenges.

China's economy grew 4.5% in the July-September quarter compared to the previous year, an increase from the 4.3% growth recorded in the April-June period. The growth is primarily driven by robust exports, helping the country move toward its official annual target of 4.5% to 5%. However, officials and economists noted that domestic demand remains weak, largely due to a prolonged downturn in the property market.

Export Growth and Trade Imbalances

China is on track to exceed its previous record of a $1.2 trillion global trade surplus, having already recorded a $938 billion surplus between January and September. Export growth is being driven by high-tech sectors, including semiconductors and electric vehicles. While China has expanded manufacturing capacity to pursue self-sufficiency, weakened domestic consumption has led to a surge of lower-cost goods being shipped to international markets. This reliance on foreign demand has drawn criticism from trade partners concerned about the impact on their own industries. The European Union, which runs a daily trade deficit with China exceeding $1.1 billion, recently reached an agreement with Beijing to reduce hybrid vehicle imports. Economists warn that trade imbalances remain difficult to resolve and may lead to increased protectionism globally.

Domestic Economic Challenges

Mao Shengyong, deputy head of China's National Bureau of Statistics, acknowledged that the foundation for a stable economy requires further consolidation, citing a volatile international environment and insufficient domestic demand. The property market downturn continues to squeeze household wealth and increase savings, limiting consumer spending. Experts suggest that the official growth figure may mask widening disparities across different industries, regions, and households.