China’s economy grew at a slowest pace in a year, expanding by 4.8% in July-September due to trade tensions with the U.S. and weak domestic demand. Exports to the U.S. dropped by 27% in September, while global exports rose 8.3%. Domestic passenger car sales increased by 11.2%.

The economy slowed in the last quarter due to measures to curb price wars in sectors like auto manufacturing. China faces challenges including a property sector downturn affecting consumption. Residential property sales fell by 7.6%, while industrial output rose 6.5%. Retail sales growth slowed to 3%.

Ratings agency S&P predicts a decline in new home sales, while the World Bank estimates a 4.8% growth rate for China’s economy this year. The government’s official growth target is around 5%. Chinese shares rose, with the Hang Seng up 2.3% and the Shanghai Composite up 0.5%.

External complications and protectionist policies contributed to the slowdown. China’s stronger first half growth provides a buffer to achieve the full-year target. Spending during Golden Week was disappointing, reflecting sluggish consumer confidence. Investments in fixed assets fell 0.5%, highlighting weakness in domestic demand.

Economists anticipate a rate cut by China’s central bank to boost spending and investment. China’s economy may further slow in 2026, with property investment continuing to decline and the AI boom expected to moderate. There is potential for further government measures to support consumption and the property market.

Read more at Yahoo Finance: China’s economy slows to 4.8% annual growth in July-September, hit by tariffs and slack demand