Surging exports and the industrial production needed to sustain them kept China’s economy growing over the past three months, even as consumer spending stagnated and investment plunged.
China’s National Bureau of Statistics announced on Monday that gross domestic product grew 1.2 percent from the second quarter of this year. If that pace continues for a year, the Chinese economy will expand at an annual rate of about 4.9 percent.
But many Western economists have become increasingly skeptical of China’s official statistics, particularly as Beijing has gradually stopped publishing thousands of narrowly focused data sets that had provided separate checks on broader economic figures. Independent estimates of recent growth have generally been only half to two-thirds as high as the official numbers.
China’s export boom from July through September, which further widened its enormous trade surplus with the rest of the world, helped shield the economy from a much worse outcome. Exports in September rose at their fastest year-over-year pace since July 2010, excluding months distorted by the timing of Lunar New Year celebrations, which disrupt factory production for weeks.
Those exports lifted the broader economy, which was 4.5 percent larger in the third quarter than a year earlier. That compared with a 4.3 percent increase in April to June, which briefly raised concerns that the country might fall slightly short of its official target of 4.5 to 5 percent growth this year.
At home, the picture was far bleaker.
Retail sales were weak through the third quarter. A prolonged housing market crash, which has driven existing-home prices down roughly 40 percent since 2021, has wiped out much of the middle class’s savings and left millions of households reluctant to spend.
Sales of cars and other durable goods, including household appliances, have plummeted.
An extensive government program of trade-in subsidies, introduced in the summer of 2024 and continued through the end of 2025, encouraged households to make purchases of things they might otherwise have waited to buy. Many consumers have little reason now to replace their cars or appliances. Car sales have fallen far below even their pre-subsidy levels, as rising unemployment further undermined consumer confidence.
ANZ Research said the latest government figures raise concerns about imbalance in China’s economy. “While exports have provided an important buffer, they are unlikely to fully offset softness elsewhere in the economy,” the research arm of Australian banking group ANZ wrote in a research note on Monday.
Chinese leaders have repeatedly pledged to strengthen consumer spending, but the economy is growing even more dependent on exports. Retail sales remained sluggish in September, rising 1.1 percent from a year earlier, though that was a modest improvement from previous months. Industrial production, meanwhile, surged 5.5 percent — five times as fast — as factories produced more cars, electronics and other goods for export.
Investment has slumped, particularly in real estate construction. Even infrastructure spending, long a mainstay of Chinese economic growth, has faltered. The collapse of many real estate developers has devastated local governments’ revenue from land leases, historically their largest source of funds for building roads, bridges, rail lines and other public works.
The result is an economy increasingly dependent on selling goods abroad, even as domestic demand deteriorates.
“China basically must keep global export markets open for this system to continue to operate,” said Logan Wright, a partner at Rhodium Group, a research firm.
Mao Shengyong, the spokesman and deputy commissioner of the National Bureau of Statistics, said at a news conference in Beijing on Monday: “We should be aware that the international environment is complex and volatile, the issue of insufficient domestic demand remains prominent, and the foundation for steady economic growth still needs to be consolidated.”
The stark divide between China’s industrial strength and its struggling domestic economy is visible in cities like Nanjing, a former capital in central China, and Guangzhou, the commercial hub of southeastern China.
Nanjing South Railway Station is a colossal monument to China’s world-leading high-speed rail system. Some of the country’s busiest north-south rail lines intersect there with major east-west lines that stretch inland from Shanghai along the Yangtze River.
But just a 10-minute walk away, a nearly deserted three-story shopping mall offers a strikingly different portrait of the economy. Its arches painted in golden and burnt sienna hues, the mall was almost devoid of shoppers last week. Many storefronts were shuttered. The few businesses still operating had only one employee, or sometimes no one at all, relying instead on China’s ubiquitous security cameras to deter theft.
In one nearly empty store, cans of tile grout and other flooring supplies sat piled up, with no customers in sight. “Our sales have fallen by around 30 to 50 percent over the past two years,” said the store owner, who gave his family name, Zheng. “It’s the same across all industries, not just ours.”
At a nearby wood paneling shop, sales have nearly halved over the past five years.
“The real estate market hasn’t recovered, and that’s affecting all kinds of businesses; the Nanjing economy was built on real estate,” said the shop owner, who gave her family name, Liu.
While businesses tied to the housing market struggle, some of China’s strongest manufacturers are benefiting from the global rush to build data centers, including in the United States. Exports of everything from power management equipment to steel racks for computer servers have soared.
Yet even as exports jumped 36 percent in September from a year earlier, Beijing remains wary of letting the country’s weak currency regain much of its previous value. The government has also been cautious about scaling back more than $300 billion a year in tax breaks for exporters. That support is essential for many lower-tech manufacturers, like the garment makers, which face tariffs in overseas markets and consumers unwilling to spend at home.
In Guangzhou, Tang Xiangfa, who has run a zipper shop for more than a decade, has watched his sales tumble.
“If business gets so bad that we can’t keep going, then we’ll have no choice but to switch to another business,” he said. “If we can keep going, we’ll continue.”
Ruoxin Zhang contributed research.