GDP momentum keeps growth on track

China's robust 5.2 percent economic expansion in the first three quarters has laid a solid foundation for achieving its full-year growth target, analysts said, as the world's second-largest economy continues to show resilience with strong industrial production despite headwinds.

They said growth momentum is expected to persist in the final quarter of the year, supported by a potential new round of measures aimed at shoring up demand, spurring consumption and reviving confidence in the property market.

Wang Qing, chief macroeconomic analyst at Golden Credit Rating International, said, "We expect China's GDP growth to stabilize in the fourth quarter, driven by the implementation of growth-stabilizing policies, enabling the country to smoothly achieve its full-year target of around 5 percent."

Wang made the comment after data from the National Bureau of Statistics showed on Monday that China's gross domestic product grew 4.8 percent year-on-year in the third quarter, following a 5.2 percent rise in the second quarter. In the first three quarters, China's GDP rose 5.2 percent after 5.3 percent growth in the first half of the year.

"China's third-quarter GDP growth matched our forecast and slightly exceeded consensus expectations," said Sheana Yue, a senior economist at British think tank Oxford Economics.

Economic activity picked up in September after softening in July and August, with industrial output up 6.5 percent year-on-year in September, compared with a 5.2 percent rise in August, marking the first acceleration in three months.

"The shift toward higher-value segments is showing up in industrial activity, which exceeded expectations in September," Yue noted. "Our estimates suggest that production of high-tech manufacturing, including transportation equipment, electrical machinery and electronics manufacturing, remained strong, growing by a six-month high of 11.3 percent year-on-year last month."

Yue said her team expects to see more support and guidance on the high-tech sector when details of the 15th Five-Year Plan (2026-30) emerge in the next few days, extending the tailwind from this and related sectors.

Meanwhile, consumers continue to keep their purse strings tight, as NBS data showed that retail sales, a key measurement of consumer spending, increased 3 percent year-on-year in September, down from the 3.4 percent growth in August.

"In the near term, we continue to expect targeted macro policy support, such as the 19-step package to boost service consumption and financing support for local investment, for the remainder of this year," Yue said.

Wang, from Golden Credit Rating International, also expects consumption-boosting policies to be stepped up in the fourth quarter, with possible moves including raising subsidies for trade-in deals for consumer goods, issuing consumption vouchers nationwide, and supporting export-to-domestic sales, which could lift retail sales growth to about 4 percent for the year, up 0.5 percentage point from the previous year.

Meanwhile, he also highlighted that the key to boosting consumption lies in reviving the property market as soon as possible to effectively restore consumer confidence.

"To stabilize the macroeconomic performance in the fourth quarter and the first quarter of next year, the necessity of introducing a new round of growth-stabilizing policies has increased — with a focus on stronger fiscal support, monetary easing and greater efforts to halt the decline and stabilize the real estate market," he added.

Looking ahead, Alex Muscatelli, director of sovereign economics at Fitch Ratings, said his team expects stable GDP growth in the last quarter of the year.

"We do expect some degree of further policy loosening, and we have had announcements of extra bond issuance in recent days," Muscatelli added. "If these were implemented swiftly and focused on growth-enhancing areas of public spending, this would provide an upside to our full-year growth forecast."