China’s GDP reportedly grew 4.8% year-on-year in the third quarter, on par with market expectations. It marks a further slowdown from the previous quarter, when growth slowed to a reported 5.2% following an expectation-beating first three months. This takes the officially announced growth numbers for the first nine months to 5.2%.
China’s GDP numbers are widely regarded as more of a political choice rather than a true reflection of the state of the economy. Taking that view, even though the overall growth rate is ahead of the 5% target for the year, a reported 4.8% growth is below the benchmark and signals that things are not going as well as they could be.
The current number comes off the back of a massive front-loading of exports to beat tariffs, which suggests that the growth can’t be sustained at the current level indefinitely and also that the domestic economy probably isn’t doing well. China’s top leaders are convening for the fourth plenum this week, during which the initial layout of the 15th Five-Year Plan will be announced. This plan needs to address the current economic headwinds and it will be up to China’s leadership to resolve the issue.