3 hours ago
2
A further increase in China’s trade surplus failed to fully offset the effects of a worsening housing market, which has left consumers wary.
Oct. 19, 2025Updated 10:51 p.m. ET
Strong exports and continued investment in new factories offset faltering retail sales and a further erosion of China’s housing market as growth in the Chinese economy held steady over the summer.
During the third quarter of the year, from July through September, China’s economy expanded 1.1 percent over the previous quarter, maintaining roughly the same pace as during the spring, China’s National Bureau of Statistics said in a statement on Monday. If that pace continues, the economy will expand about 4.1 percent over the next 12 months.
Over the past four years, a plunging housing market has erased much of the savings of Chinese households, causing many to curtail spending and hurting retail sales. The central government has tried to offset this by providing subsidies for consumers to buy smartphones, electric cars, appliances and other manufactures goods that are made mainly China. But some local governments, which bear part of the cost of the subsidies, are trimming their spending on these programs.
Apartment prices are down by as much as 40 percent in many cities from their peak in the summer of 2021, dealing a crippling blow to the country’s developers and builders. The contraction in real estate and construction, which used to represent a quarter of China’s economy, continued during the third quarter.
Retail sales of consumer goods are still weakening. They were up only 3 percent in September from the same month last year, according to data released on Monday. That was the smallest increase since November last year, when the increase was also 3 percent.
Investment in new factories offset some of this weakness until this past summer. The government has recently become concerned about manufacturing overcapacity, price wars and other signs of excessive competition.
China’s investment in exports, and policies to replace imports with domestically produced goods, continue to drive the economy. The country’s surplus in the trade of merchandise increased 12.4 percent in the past three months compared with the same period last year.
China’s trade surplus, the amount by which exports exceed imports, is on track to surge well past $1 trillion this year, breaking its own record last year. While China’s exports to the United States have dipped following President Trump’s imposition of tariffs, its exports to developing countries have soared.
Image
Some of the exports to other countries are then shipped to the United States. But others are being used to build factories and solar panel farms in emerging markets and to take market share away from local businesses. A growing number of countries, from Brazil to Turkey to Indonesia, have begun to follow the American example by imposing tariffs on imports from China.
The growth data announced on Monday was slightly better than many economists had expected because the National Bureau of Statistics revised its calculation of the preceding quarter lower. The bureau said economic output was 1 percent larger in the spring than during the winter, and not 1.1 percent larger, as it had announced in July.
The data release began with an upbeat statement from the statistics bureau, portraying the economy as essentially healthy. “The national economy demonstrated strong resilience and vitality” during the third quarter, the statement said.
By a measure the Chinese government prefers to highlight, the economy was 4.8 percent larger in the third quarter than in the same quarter last year, the agency said on Monday. Some analysts have questioned whether Chinese data may overstate the economy’s performance.
The statistics bureau did not hold its customary news conference to discuss the data, possibly because the regularly scheduled release of the quarterly data coincided with the start on Monday of the annual gathering of the Chinese Communist Party Central Committee. The committee, composed of 370 of the most powerful people in China, is expected to review and discuss the country’s Five Year Plan for policies on the economy and other issues from 2026 through 2030.
The Central Committee is expected to approve steps in the coming months to address the country’s economic weakness. Some economists expect the Chinese leadership to announce measures to help households and reinforce consumer spending, such as increasing pensions for rural seniors, who currently receive as little as $20 a month.
“The property slump is weighing on retail sales, but further consumption-boosting measures are in the cards,” said Xu Sitao, the chief China economist at Deloitte.
But other economists expect China’s leadership to reinforce the country’s longstanding emphasis on building rail lines, highways, bridges, hydroelectric dams and other government-led construction projects.
Many local governments cannot afford these projects because their land sales to developers, previously one of their largest sources of revenue, have withered during the real estate slump even as their upkeep costs are surging for recently built infrastructure. But China’s national government has considerable capacity to finance big projects and is likely to continue doing so, notably in western China, said Dan Wang, a China economist in the Singapore office of Eurasia Group, a global consulting firm.
“For local governments, it’s all about maintenance now — the construction has been left to the central government,” she said.
Keith Bradsher is the Beijing bureau chief for The Times. He previously served as bureau chief in Shanghai, Hong Kong and Detroit and as a Washington correspondent. He lived and reported in mainland China through the pandemic.
