Key Takeaways
- China's Q3 GDP growth of 4.8% year-on-year met expectations, but the overall economic picture remains mixed, with robust industrial output contrasting with a persistent slump in the property sector and moderating retail sales.
- Industrial production surged by 6.5% year-on-year in September, significantly exceeding forecasts, while the surveyed jobless rate saw a slight improvement to 5.2%.
- The embattled property market continued its deep contraction, with residential property sales down 7.6% year-to-date and property investment falling 13.9% year-to-date, alongside accelerating month-on-month declines in both new and used home prices.
- Fixed asset investment excluding rural areas shifted into contraction at -0.5% year-to-date, missing estimates, and retail sales growth slowed to 3.0% year-on-year in September.
- Geopolitical developments saw Iran, China, and Russia declare the termination of the Tehran nuclear agreement, while Ukrainian President Zelensky warned allies against appeasing Russia after an unsuccessful trip to the U.S.
China's economy presented a complex picture in the third quarter of 2025 and September, with official data released today showing a mix of resilience in some sectors and deepening challenges in others. Gross Domestic Product (GDP) for Q3 expanded by 1.1% quarter-on-quarter seasonally adjusted, meeting previous figures and beating analyst estimates of 0.8%. Year-on-year, Q3 GDP grew by 4.8%, aligning with expectations, though it marked a slowdown from the previous quarter's 5.2%. Year-to-date GDP growth stood at 5.2%.
A notable bright spot was industrial production, which saw a significant acceleration in September, rising 6.5% year-on-year, well above the 5.2% recorded in August and surpassing estimates of 5%. Year-to-date industrial production maintained a steady growth of 6.2%. The surveyed jobless rate also showed a slight improvement, dipping to 5.2% in September from 5.3% previously, beating the estimated 5.3%.
However, the nation's colossal property sector continued to be a major drag on economic performance. Residential property sales contracted by 7.6% year-to-date year-on-year, a deeper decline than the -7% seen previously. Property investment year-to-date plummeted by 13.9% year-on-year, worsening from a -12.9% previous reading and falling short of the -13.1% estimate. Compounding these woes, new home prices fell by 0.41% month-on-month in September, an accelerating decline from -0.30% in August, while used home prices saw a sharper drop of 0.64% month-on-month.
Further indicating an uneven recovery, fixed asset investment excluding rural areas shifted into contraction, registering -0.5% year-to-date year-on-year, a significant downturn from the 0.5% growth previously and missing the 0.1% estimate. Retail sales growth also moderated, with September year-on-year sales increasing by 3.0%, meeting estimates but slower than the 3.4% in August. Year-to-date retail sales growth was 4.5%, a slight dip from 4.6% previously.
In other market movements, China's top coking coal contract saw a significant jump of 4.6%, reaching ¥1,238.5/ton. The Yuan opened stronger against the dollar at 7.1250 compared to its previous close of 7.1277. Chinese equity indices related to technology showed positive sentiment, with the CSI Semiconductor Index expected to rise 2% at open and the CSI AI Index projected for a 3.3% increase. The Hang Seng Biotech Index was also anticipated to open 2.7% higher. Prospects of upbeat US-China trade talks contributed to a climb in soybean prices.
Beyond economic figures, geopolitical tensions remain a key focus. Iran, China, and Russia jointly informed the United Nations of the termination of the Tehran nuclear agreement, a significant development in international relations. Meanwhile, Ukrainian President Volodymyr Zelensky warned allies against appeasing Russia following a U.S. trip where he reportedly failed to secure long-range Tomahawk missile supplies. In Asia, the South Korean central bank head indicated plans to withhold extra liquidity as property prices climb, while Japanese Government Bond (JGB) yields dipped, with the 40-year yield down 1.5 bps to 3.405% and the 30-year yield down 1.5 bps to 3.105%. The Yen weakened amidst fading political uncertainty in Japan. Globally, U.S. credit spreads reportedly dropped to their lowest level since 1998.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.