China’s economy grows 4.8% in third quarter as expected, but investment sees ‘rare and alarming’ drop

BEIJING — China’s economy expanded by 4.8% in the third quarter from a year ago, matching analyst predictions despite the ongoing real estate slump.

Fixed-asset investment, which includes real estate, unexpectedly contracted 0.5% in the first nine months of the year as investment into infrastructure and manufacturing slowed. Analysts polled by Reuters had forecast a 0.1% growth.

Property investment extended its decline, sliding 13.9% in the year through September, compared with a 12.9% drop during the first eight months of the year.

The drop in fixed-asset investment is “rare and alarming,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in a note. He warned that fourth-quarter GDP growth faces downward pressure.

The last time China recorded a contraction in fixed-asset investment was in 2020 during the pandemic, according to data going back to 1992 from Wind Information.

Retail sales rose 3% in September from a year ago, matching analyst forecasts.

Industrial production climbed 6.5% in September, topping expectations for a 5% increase and up from 5.2% growth in the previous month.

However, retail sales slowed from 3.4% year-on-year growth in August, while third-quarter GDP slowed from 5.2% growth in the previous quarter.

Official data for September also showed continued resilience in China’s exports despite tensions with the U.S.

The core consumer price index, which strips out food and energy, rose at its fastest pace since February 2024. But headline inflation fell 0.3%, missing expectations as deflationary pressures persisted.

Earlier Monday, China kept its benchmark lending rates unchanged for a sixth-straight month, in line with expectations, with the one-year loan prime rate at 3% and the five-year rate at 3.5%.