US trade tension slows down China’s economic growth

(MENAFN) China’s economic expansion slowed in the third quarter as property market struggles persisted and trade tensions with the United States intensified. Official figures released Monday show the world’s second-largest economy grew 4.8% year-on-year from July to September, marking its slowest pace in a year.

The slowdown follows Beijing’s recent decision to impose broad controls on rare earth exports—critical minerals for electronics manufacturing—which rattled the fragile trade truce with Washington. US President Donald Trump responded by threatening to impose an additional 100% tariff on imports from China.

The new growth data will play a key role in shaping discussions among China’s top leaders this week as they outline the country’s economic priorities for the next five years. The 4.8% growth rate represents a decline from the 5.2% annual growth recorded in the second quarter.

Despite the slowdown, China’s National Bureau of Statistics emphasized the economy’s “resilience and vitality,” citing robust performance in the technology sector and business services as key growth drivers. Beijing had targeted roughly 5% growth for the year and has so far avoided a sharp downturn, aided by government support measures and the previously stable trade truce with the US.

China’s industrial output rose 6.5% in September, with strong contributions from 3D printing, robotics, and electric vehicle manufacturing. Its service sector, covering IT, consultancies, transport, and logistics, also continued to expand. Exports, which climbed 8.4% in September, have helped offset weak domestic consumption, according to Sheana Yue, senior economist at Oxford Economics.

However, the property sector remains a major drag. Real estate investment fell 13.9% year-on-year up to September, with home prices dropping in nearly every major city. Shrinking sales, abandoned projects, and falling revenues for local governments underline the severity of the downturn. Laura Wu, an economics lecturer at Nanyang Technological University, noted that housing remains the “primary restraint on China’s economic growth,” compounded by uncertainty from potential US tariffs and trade barriers.

Beijing has tried to stimulate domestic consumption through subsidies, wage incentives, and discounts, but analysts say economic growth is unlikely to surpass 4.8% this year without additional government support, which may be outlined in the upcoming Five-Year Plan.

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