China's economic growth picks up as exports boom, consumers balk

China's economic growth rose in the third quarter, driven by a surge in exports, despite consumers being reluctant to spend. The 4.5% growth exceeded expectations, and analysts believe Beijing will achieve its 4.5%-5.0% target for 2026 without further stimulus. Retail sales remained sluggish, while the property market continued to decline, eroding household wealth. Consumer inflation was soft, but exports increased by more than a third.

Zhang Chao, a motorbike headlights company owner, has shifted focus to export markets due to unprofitability in China. Laura Shi, who lost her sales job in June, still travels through China during holidays but sleeps in her car to save on accommodations. Weak consumer demand has led to price wars, forcing companies to reduce costs, including wages. Laura's employer, Dai, said many employees are leaving, and some consider taking on additional work themselves.

China's growing reliance on external factors deepens structural imbalances, prompting concerns from the global community. The European Union and China agreed to limit hybrid car exports to the bloc, with Brussels planning further restrictions due to a massive surge in trade surpluses with Germany and France. The growth challenges underscore Beijing's focus on export-led and state-led development, with domestic demand still insufficient to sustain growth.

Industrial output surged 5.5% in September, but Beijing's support measures remain targeted towards the supply side, with limited impact on household incomes and consumption.