China’s economy grew 4.5 percent year on year in the July-September quarter, beating expectations and accelerating from 4.3 percent in April-June, which had been the slowest pace in three years. Strong exports drove the pickup.
Exports carry the load
Exports jumped 36 percent last month. China’s trade surplus reached $938 billion in the January-September period, after a record $1.2 trillion surplus last year. Passenger vehicle exports totalled 919,000 units in September alone and 7.1 million for the first nine months of 2026, more than 70 percent higher than the same period a year earlier.
The EU has agreed with China to roughly halve imports of Chinese plug-in hybrid vehicles over the coming years, capping them at 350,000 units annually, though some member states are pushing for further restrictions.
Growth target and warnings
Beijing has set a 2026 growth target of 4.5 to 5 percent, down from last year’s 5 percent outcome. The IMF cut its 2026 China growth forecast to 4.5 percent, the lower bound of that range, earlier in the month.
Max Zenglein, Conference Board Asia-Pacific senior economist, said the headline official growth rate is an increasingly weak indicator of the economy’s overall trajectory, and that the impressive-looking figure masks widening gaps across sectors, regions and households. Ecaterina Bigos, BNP Paribas Asset Management senior market strategist, said the technology-focused, export-dependent model has kept job and income growth limited, and that the risk of AI-driven job losses has grown.
Lynn Song, ING chief economist for Greater China and Northeast Asia, said trade imbalances will be difficult to resolve in a short time. People’s Bank of China governor Pan Gongsheng said surplus and deficit countries should cooperate, and that China is committed to boosting domestic demand.
Related: China Retail Sales Growth Beats Forecast at 1.1%
Source: People's Bank of China · IMF
