China’s economy grew 4.5% in the previous quarter, fueled by robust exports

China's economy expanded 4.5% in the July-September quarter, driven by robust exports, according to official data released on Monday. This growth rate marks an improvement from the 4.3% expansion recorded in the previous quarter, signaling progress towards China's official annual growth target of 4.5%-5% for the year. The IMF has also reduced its forecast for China's economic growth in 2026 to 4.5%, aligning with Beijing's goal.

Despite the positive export figures, domestic demand remains sluggish, with challenges stemming from a prolonged decline in the property market and increased savings by households. Export-oriented growth, particularly in high-tech sectors such as semiconductors and automobiles, has been instrumental in sustaining China's trade surplus and bolstering economic performance.

However, this model has led to limited job creation and income gains, as well as potential risks associated with artificial intelligence-driven labor displacement. China's reliance on exports has drawn concerns from trading partners, including the European Union, which has a trade deficit with China exceeding $1.1 billion daily.

While China and the EU have signed an agreement to reduce the number of Chinese hybrid vehicle imports, fully resolving trade imbalances remains a complex and protracted process.