China’s Q3 Economic Growth Edges Past Forecasts Amid Weak Domestic Demand

China’s economic growth slightly exceeded expectations in the third quarter of this year, but a global energy crisis and weak domestic demand continue to weigh on the world’s second-largest economy.

Data released on Monday showed that stronger exports provided some support, keeping China’s economic performance close to the lower end of the government’s annual growth target.

China has faced a mixed economic picture in recent years. While exports of artificial intelligence (AI)-related products have surged, the gains have not been enough to fully offset a prolonged property sector crisis and weak consumer confidence.

According to the National Bureau of Statistics of China, gross domestic product (GDP) grew by 4.5 per cent in the July-September quarter.

The growth rate was up from 4.3 per cent in the previous quarter and slightly above the 4.4 per cent forecast by economists surveyed by Agence France-Presse (AFP).

Beijing has set an economic growth target of 4.5 to 5 per cent for this year, one of the country’s lowest targets in decades.

Before the data was released, Guo Shan, an analyst at Hutong Research, told AFP that few sectors outside exports were showing notably strong performance.

He warned that China risked missing its annual growth target and said authorities had recently introduced measures to support the economy, including subsidies for mortgage interest on certain home purchases and increased investment in infrastructure.

“To achieve the growth target, Beijing needs to put the funds allocated to these sectors to work quickly,” Guo said.

Consumer spending and weak domestic demand have remained major obstacles to economic growth this year, limiting the impact of stronger export performance.

High energy prices, prolonged uncertainty and structural constraints have also clouded China’s economic outlook.

Last week, the International Monetary Fund (IMF) slightly lowered its forecast for China’s annual economic growth to 4.5 per cent for this year.

IMF officials gathered in Bangkok for meetings with the World Bank described Beijing’s recent support measures as “limited”, highlighting concerns over whether current policy efforts will be sufficient to strengthen domestic demand and sustain growth.

With exports providing much of the economy’s momentum, China faces continued pressure to stimulate household spending, stabilise its property sector and accelerate investment to meet its annual growth target.