China’s economy expanded by 4.8% in the third quarter, its weakest pace in a year, as sluggish domestic demand left the country leaning heavily on exports to sustain growth.
Analysts warn that this growing dependence on foreign markets amid a deepening trade dispute with the United States could threaten China’s economic stability in the medium term.
Although the growth rate met expectations and keeps Beijing on track to achieve its 5% annual target, it masks deeper imbalances. Export strength continues to prop up output, but it comes at the cost of weaker consumer spending, falling home prices, and job insecurity.
China’s export sector remains the main driver of growth, even as trade tensions with Washington intensify. Factories are turning to new markets in Latin America, Africa, and Southeast Asia to offset a steep 80–90% drop in U.S. orders.
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Jeremy Fang, a sales officer at a Chinese aluminium firm, said his company lost 20% of its total revenue despite higher sales elsewhere.
“You have to be ruthlessly competitive on price,” Fang said. “If a buyer bargains, you drop your price and take the deal. Hesitation means losing the order.”
This aggressive price war is squeezing profit margins and forcing exporters to cut wages and jobs. While industrial output rose 6.5% year-on-year in September, retail sales slowed to 3%, their lowest level in 10 months. Home prices also fell at their fastest pace in nearly a year, deepening the property slump.
Analysts at Capital Economics caution that China’s increasing reliance on exports is unsustainable.
“Growth is at risk of slowing further unless authorities take stronger steps to support consumer spending,” said analyst Julian Evans-Pritchard.
Investment in the crisis-hit property sector dropped 13.9% in the first nine months of 2025, while overall fixed-asset investment fell 0.5%.
Five-Year Plan to Focus on Technology, Not Consumers
These concerns come ahead of a key Communist Party meeting this week, where leaders will discuss China’s next five-year plan. While officials are expected to promise more efforts to boost domestic demand, the plan is also set to emphasize technological self-reliance and industrial upgrading as national security priorities, potentially keeping resource allocation skewed toward manufacturers rather than households.
A structural shift toward household consumption could ease trade tensions and boost global demand, but Beijing shows little sign of changing course as competition with Washington intensifies.
China has managed to diversify away from U.S. markets, with exports to the EU, Southeast Asia, and Africa growing 14%, 15.6%, and 56.4%, respectively. However, the U.S. has threatened new tariffs of up to 100% on Chinese imports after Beijing leveraged its dominance in rare earth minerals during trade negotiations.
Still, some experts believe Beijing can endure the economic strain longer than Washington.
“China can suffer for longer than the U.S.,” said Yuan Yuwei, hedge fund manager at Water Wisdom Asset Management. “If Americans lose 10–20% of their wages, they protest. In China, people tighten their belts.”
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Overall, China’s economy grew 5.2% between January and September. While policymakers may accelerate infrastructure spending to sustain momentum, analysts say large-scale stimulus is unlikely this year.
“China is still on track to hit its 2025 growth target,” said Lynn Song, Chief Economist for Greater China at ING. “But weak confidence, soft consumption, and a deepening property downturn must still be addressed.”
Esther Ososanya is an investigative journalist with Pinnacle Daily, reporting across health, business, environment, metro, Fct and crime. Known for her bold, empathetic storytelling, she uncovers hidden truths, challenges broken systems, and gives voice to overlooked Nigerians. Her work drives national conversations and demands accountability one powerful story at a time.
