China's Economic Growth Slows Amid Renewed Trade Tensions with the US

China’s economic growth decelerated in the three months leading up to the end of September, as trade tensions with the United States once again flared up.

Official figures released on Monday show that the world’s second-largest economy expanded by 4.8% compared to the same period in 2024 — marking its weakest pace in a year.

The slowdown comes in the wake of Beijing’s decision to impose sweeping controls on its exports of rare earths, minerals critical to global electronics production. The move has reignited trade frictions with Washington and rattled what had been a fragile truce between the two economic powers.

The third-quarter GDP figures will be closely scrutinized as China’s top leadership convenes this week to chart the country’s economic blueprint for 2026 to 2030. The 4.8% growth recorded between July and September represents a decline from the 5.2% growth rate in the previous three-month period.

In a statement, China’s National Bureau of Statistics said the nation’s economy demonstrated “strong resilience and vitality” despite mounting pressures. The bureau credited the country’s technology sector and business services as key contributors to sustaining economic momentum.

Beijing has maintained its annual growth target of “around 5%” and has thus far avoided a steep downturn, bolstered by government support measures designed to stabilize demand and confidence.

The escalation of trade tensions drew a swift response from Washington. US President Donald Trump warned of imposing an additional 100% tariff on imports from China in retaliation for the new rare earth export restrictions. Meanwhile, US Treasury Secretary Scott Bessent announced plans to meet with Chinese officials in Malaysia later this week to seek ways to de-escalate the situation and potentially arrange a meeting between Trump and Chinese President Xi Jinping.

Prior to this latest flare-up, Chinese exporters had benefited from the period of relative calm between the two nations. During that time, China’s exports surged by 8.4% in September, while imports also increased, reflecting steady domestic and international demand.

China’s industrial output showed solid performance, expanding by 6.5% last month compared to a year earlier. Among the standout industries were 3D-printing, robotics, and electric vehicle manufacturing, all of which continued to strengthen their positions within the economy.

The service sector — encompassing IT support, consultancies, transport, and logistics — also recorded growth, reinforcing its role as an essential driver of China’s ongoing economic transformation.

Despite the slowdown, Beijing remains confident that the economy will maintain stability. As policymakers gather to outline the next phase of China’s economic agenda, global observers will be watching closely to see how the world’s second-largest economy navigates the renewed strain in its relationship with the United States. 

By fLEXI tEAM