China’s economy grew by 4.8% year-on-year in the third quarter, aligning with market forecasts, even as structural challenges in the property sector and weakening investment continue to weigh on momentum. n nFixed-asset investment, a key gauge of economic activity encompassing infrastructure, manufacturing, and real estate, declined by 0.5% during the first nine months of the year. This unexpected contraction contrasts with the 0.1% growth anticipated by analysts surveyed by Reuters. The last time such a drop occurred was in 2020, during the initial phase of the pandemic. n nReal estate investment, a major drag on overall investment, fell 13.9% year-to-date through September, deepening from the 12.9% decline recorded in the first eight months. Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, described the investment downturn as “rare and alarming,” cautioning that gross domestic product growth in the final quarter may face additional headwinds. n nConsumer spending showed modest improvement, with retail sales increasing 3% in September compared to the same month last year, in line with expectations. However, this marked a slowdown from the 3.4% rise seen in August. Industrial output, meanwhile, accelerated to 6.5% in September, surpassing the forecasted 5% and up from 5.2% the prior month. n nDespite resilient export performance amid ongoing U.S.-China trade tensions, domestic demand remains subdued. The core consumer price index, excluding volatile food and energy components, rose at its quickest rate since February 2024, signaling some underlying inflationary pressures. However, headline inflation dipped 0.3%, reflecting continued deflationary trends in the broader economy. n nIn a move signaling policy restraint, Chinese authorities held benchmark lending rates steady for the sixth consecutive month, maintaining the one-year loan prime rate at 3% and the five-year rate at 3.5%. n— news from CNBC
— News Original —
China’s economy grows 4.8% in third quarter as expected, but investment sees ‘rare and alarming’ drop
BEIJING — China ‘s economy expanded by 4.8% in the third quarter from a year ago, matching analyst predictions despite the ongoing real estate slump. n nFixed-asset investment, which includes real estate, unexpectedly contracted 0.5% in the first nine months of the year as investment into infrastructure and manufacturing slowed. Analysts polled by Reuters had forecast a 0.1% growth. n nProperty investment extended its decline, sliding 13.9% in the year through September, compared with a 12.9% drop during the first eight months of the year. n nThe drop in fixed-asset investment is “rare and alarming,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in a note. He warned that fourth-quarter GDP growth faces downward pressure. n nThe last time China recorded a contraction in fixed-asset investment was in 2020 during the pandemic, according to data going back to 1992 from Wind Information. n nRetail sales rose 3% in September from a year ago, matching analyst forecasts. n nIndustrial production climbed 6.5% in September, topping expectations for a 5% increase and up from 5.2% growth in the previous month. n nHowever, retail sales slowed from 3.4% year-on-year growth in August, while third-quarter GDP slowed from 5.2% growth in the previous quarter. n nOfficial data for September also showed continued resilience in China ‘s exports despite tensions with the U.S. n nThe core consumer price index, which strips out food and energy, rose at its fastest pace since February 2024. But headline inflation fell 0.3%, missing expectations as deflationary pressures persisted. n nEarlier Monday, China kept its benchmark lending rates unchanged for a sixth-straight month, in line with expectations, with the one-year loan prime rate at 3% and the five-year rate at 3.5%.