China’s economy grows 4.5% as exports offset weak domestic demand

China’s economy grew 4.5% from a year earlier in the July–September quarter, the National Bureau of Statistics reported on 19 October 2026. Growth accelerated from 4.3% in April–June as exports supported the economy, while weak domestic demand and a prolonged property slump weighed on activity.

The result was slightly above the 4.4% forecast in an AFP poll of economists. It remained below the 5% growth recorded in January–March and was at the lower end of Beijing’s 4.5%–5% target for 2026.

Exports support growth as the property slump persists

The export gains contrast with conditions at home. The BBC reported, citing official data, that property investment fell by more than 20% in the first nine months of 2026 compared with a year earlier. Euronews said the years-long property slump has eroded household wealth and encouraged saving, contributing to softer domestic demand.

That divide matters for Beijing’s annual target: stronger overseas sales have helped sustain growth even as the domestic market remains subdued. China’s manufacturers have increasingly looked abroad for new growth, AFP reported. The shift has also added to pressure from trading partners seeking to narrow their trade deficits with Beijing, according to Euronews.

What September retail figures show

Separate figures showed retail activity rose 1.1% in September, its fastest pace since March, AFP reported. The increase came after consumer activity had dragged on growth earlier in the year. Guo Shan of Hutong Research told AFP ahead of the GDP release that China risked missing its annual target and would need to deploy support funds faster.

Max Zenglein, Asia Pacific senior economist at The Conference Board, said the headline growth figure was becoming ‘an increasingly poor indicator of how the broader economy is performing’, according to Euronews. He warned that it masked widening disparities across industries, regions and households.