Economy
Euro Pulse
Inflation Creeps Up, Trade Falters
10/17/2025
10/20/2025
China’s economy grew 4.8% year-on-year in the third quarter, down from 5.2% in Q2. That’s the slowest pace in a year, but it matched forecasts and keeps Beijing on track to hit its annual growth goal of “around 5%” for the whole year.
The headline number masks deeper concerns. Growth is increasingly powered by exports, while domestic demand remains weak.
September data showed a sharp divide:
This signals an economy leaning on production for foreign markets, while domestic consumption struggles. Without stronger household spending, China risks long-term vulnerability.
Housing Slump Hits Confidence
China’s ongoing property crisis continues to drag on growth. Home prices fell at their fastest pace in nearly a year, and real estate investment dropped nearly 14% y/y in the first three quarters.
The prolonged slump is eroding consumer confidence and curbing spending. Developers are scaling back, construction is slowing, and the ripple effects are being felt across retail and employment.
With the trade tensions slashing US demand sharply, Chinese exporters are pivoting to new markets. Sales to Southeast Asia, Africa, and European Union are rising, helping offset losses elsewhere.
This global hustle is keeping factories busy for now but it’s also squeezing margins and weakening domestic wage growth.
China’s leaders are drafting the next five-year plan this week, with pressure mounting to shift focus from factories to families. But signs point to more industrial investment, not a consumption pivot.
Meanwhile, trade tensions may be flaring up again. The White House has threatened 100% additional tariffs in response to China’s rare earth restrictions, raising the stakes for global growth.