China’s economic trajectory

China’s economic trajectory continues to be shaped by the interplay between structural transformation and the gradual rebalancing of a growth model historically anchored in investment and industrial production. The prolonged adjustment in the property sector and a measured recovery in household expenditure coexist with increasingly sophisticated manufacturing capabilities, technological upgrading and a competitive export base. The latest economic indicators point to an economy retaining considerable growth capacity, albeit with marked differences in momentum across sectors and sources of demand. Gross domestic product expanded by 4.5 percent year-on-year in the third quarter of 2026, accelerating from 4.3 percent in the preceding quarter and exceeding market expectations. Growth over the first nine months reached 4.6 percent, placing Beijing’s annual target of 4.5-5.0 percent within reach. The improvement coincided with firmer industrial production and an acceleration in retail sales during September, indicating that economic activity gathered momentum towards the end of the quarter. While growth remains below the rates achieved during earlier phases of China’s development, its relative performance compares favourably with that of many major economies. The latest figures therefore reinforce the view that China’s economy retains meaningful underlying dynamism, while also highlighting the importance of assessing the sectoral composition and durability of that expansion.

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