China's economy accelerates growth despite weak domestic demand

China's economy accelerated growth in the third quarter of 2026 and beat analysts' expectations. The main support for the world's second-largest economy came from exports and high-tech manufacturing, while domestic consumption and the property market remain weak.

This is evidenced by data from China's National Bureau of Statistics released on October 19, reports Financial Times.

In July-September, China's gross domestic product grew by 4.5% compared to the same period last year. In the second quarter, the growth rate was 4.3%. The result also exceeded the consensus forecast of economists, who expected growth of 4.4%.

For the first nine months, the Chinese economy grew by 4.6%. This is in line with the government's annual growth target of 4.5-5%.

The main factor supporting the economy remains external demand. Over nine months, Chinese exports in yuan terms increased by 16.4%, and shipments of machinery and electrical products by 23.7%.

Deliveries of high-tech goods, especially semiconductors and data processing equipment, are growing particularly fast. Demand for such products is supported by global investments in artificial intelligence development.

Industrial production in September increased by 5.5% year-on-year. Over nine months, the output of high-tech industries grew by 14.3%, significantly outpacing the overall industrial sector development pace.

At the same time, domestic demand remains one of the main weak spots of the Chinese economy. Retail sales in September grew by only 1.1% compared to the same month last year. This indicates subdued consumer spending, despite government programs to support buyers.

The situation with investment and real estate remains particularly difficult. From January to September, fixed asset investment decreased by 7.2%, and investment in development projects by 20.6% year-on-year.

The prolonged downturn in the property sector restrains economic activity and negatively affects households' willingness to increase spending.

According to Financial Times, strong exports allow China to sustain economic growth even with insufficient domestic demand. However, such dependence makes the economy more vulnerable to trade conflicts and a possible slowdown in global demand.

Record volumes of Chinese exports have already exacerbated trade tensions with the European Union, which fears increased competition from Chinese manufacturers.

China's statistical agency also acknowledged that the problem of insufficient domestic demand remains significant. The authorities intend to continue measures to stimulate consumption and support economic activity.

Based on materials from: National Bureau of Statistics of China, Financial Times