October 19, 2026 — China’s economy expanded faster than expected in the third quarter, supported by strong exports and industrial production despite continued weakness in domestic demand.
According to China’s National Bureau of Statistics, GDP grew 4.5% year-over-year, exceeding economists’ expectations of 4.4% and accelerating from 4.3% in the previous quarter.
The improvement was largely driven by strong export demand and resilient manufacturing activity, supported by the global AI-driven technology boom.
China’s industrial production increased 5.5% in September, marking its strongest growth in six months. Meanwhile, retail sales rose 1.1% year-over-year, reaching their fastest growth rate since March.
On a quarterly basis, GDP expanded 1.2%, exceeding forecasts of 1.1% and improving from 0.9% in the second quarter.
The stronger performance keeps China on track toward its 2026 economic growth target of 4.5%–5.0%, potentially reducing the need for additional large-scale stimulus measures.
However, challenges remain. Weak consumer spending, declining private investment, and continued pressure on the property sector highlight the uneven nature of China’s recovery.
Why it matters: Stronger-than-expected growth in the world’s second-largest economy is a positive signal for global markets. Resilient Chinese manufacturing and exports could strengthen global economic confidence and support investor appetite for risk assets, including equities and cryptocurrencies.
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