China’s gross domestic product (GDP) grew 4.5% year over year in the third quarter, but weak investment left the yuan’s potential support from faster activity uncertain, MUFG analyst Michael Wan said.
The National Bureau of Statistics of China reported 4.3% growth from a year earlier in the second quarter. GDP rose 1.2% from the preceding quarter in the third. The latest annual reading exceeded the 4.4% forecast in a Reuters poll by 0.1 percentage point.
Fixed-asset investment excluding rural households fell 7.2% year over year in January-September, matching the rate of decline recorded for January-August. Real-estate development investment dropped 20.6% year over year during the first nine months. The bureau separately reported a seasonally adjusted 0.07% increase in fixed-asset investment from August to September.
September brought stronger readings for production and consumer spending. Output at industrial enterprises above designated size rose 5.5% from a year earlier, 0.3 percentage point faster than in August. Retail sales increased 1.1% year over year, compared with 0.4% in August.
In an Oct. 20 research note, Wan said firmer activity offered a better domestic setting for the yuan. He said the composition of growth matters to whether that support can last, as the improvement in production and retail sales came alongside continued investment declines.
Goods exports rose 16.4% year over year in January-September, while imports increased 22.3%, the statistics bureau said. It also identified insufficient domestic demand as a continuing concern despite the stronger September activity figures.
The bureau put GDP growth for January-September at 4.6%.
That nine-month reading covers a different period from the full-year growth goal of 4.5% to 5% set in China’s 2026 Government Work Report.
