China’s Economic Growth Slows to 4.8%, Its Weakest Pace in a Year, as Trade Tensions Escalate

China’s economy grew by just 4.8% over the past year, marking its slowest pace of expansion in 12 months as escalating trade tensions and weakening global demand weigh on growth. Analysts attribute the slowdown to declining exports, cautious consumer spending, and ongoing strains with the United States, raising concerns about Beijing’s ability to sustain recovery amid mounting economic headwinds.

China’s economy grew 4.8 percent in the third quarter of 2025, slipping below the five-percent mark and marking its slowest pace in a year, according to official data released Monday. The slowdown reflects the growing strain of U.S.-China trade tensions, weakening consumer demand, and a prolonged slump in the country’s real estate sector.

The figures, released by the National Bureau of Statistics (NBS), showed that gross domestic product in the July–September period expanded 4.8 percent year-on-year, down from 5.2 percent in the previous quarter and the lowest since the same period last year, when growth stood at 4.6 percent. The data aligned with forecasts from a recent AFP analyst survey.

The report was published just hours before state media announced the opening of a key four-day Communist Party meeting in Beijing, where top officials are expected to lay out long-term economic strategies. The slowdown also comes ahead of renewed trade discussions between Chinese and U.S. officials later this month and a potential face-to-face meeting between Presidents Donald Trump and Xi Jinping.

Tensions between Washington and Beijing have escalated sharply after Trump threatened to impose 100 percent tariffs on all Chinese goods starting November 1. The move followed Beijing’s decision to tighten export controls on rare earth materials vital for global technology and defense industries.

Economists say China’s growth model is under pressure to transition from one reliant on exports and heavy industry to one driven by domestic consumption. Fixed-asset investment during the first three quarters fell 0.5 percent year-on-year, led by a steep decline in real estate investment.

That drop is “rare and alarming,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management. He added that while recent stimulus measures may ease the pressure in the fourth quarter, “the risk to GDP growth in Q4 is likely on the downside.”

Consumer Spending Weakness Persists

China’s domestic consumption continues to lag years after the COVID-19 pandemic eroded household confidence. Retail sales in September grew just three percent from a year earlier — the weakest rate since November 2024 and down from August’s figures.

“This slowdown reflects the waning impact of the consumer goods trade-in scheme, which had boosted sales of certain products earlier in the year,” said Julian Evans-Pritchard of Capital Economics. He warned that “China’s growth is becoming increasingly dependent on exports, which are offsetting a slowdown in domestic demand,” calling the trend “unsustainable.”

Adding to Beijing’s challenges is a deepening crisis in the property sector long a pillar of China’s economy. New home prices fell in 61 of 70 cities surveyed by the NBS in September, underscoring persistent caution among homebuyers and limited recovery in the housing market.

Industrial Strength Amid Headwinds

There were signs of resilience in manufacturing. Industrial production rose 6.5 percent in September, exceeding Bloomberg’s forecast of five percent. “The national economy withstood pressure and continued to maintain steady progress,” the NBS said in its statement, highlighting stability in industrial output and export sectors.

Still, trade tensions continue to cloud the outlook. Beijing and Washington agreed over the weekend to resume trade talks this week, easing fears of an all-out tariff war after Trump told Fox News that his proposed 100 percent tariffs were “not sustainable.”

Communist Party Plenum Eyes Long-Term Goals

Attention is now focused on Beijing’s four-day Communist Party plenum, which runs through Thursday. The meeting the fourth since the current Central Committee’s term began in 2022 will lay the groundwork for China’s next five-year economic and social development plan, covering 2026 to 2030.

State media reported that the plan will emphasize President Xi Jinping’s long-term priorities, including technological self-sufficiency, strengthening China’s industrial and military capabilities, and reinforcing economic stability amid global uncertainty.

As the world’s second-largest economy faces mounting pressure from both external and internal challenges, analysts say Beijing’s ability to revive consumer confidence and navigate its trade standoff with Washington will determine whether China can avoid a more prolonged slowdown heading into 2026.

For questions or comments write to contactus@bostonbrandmedia.com

Source: NDTV