China GDP Beat Fuels Global Risk Rally as Exports Propel Lopsided Growth

Global financial markets rallied Monday after China reported faster-than-expected third-quarter economic growth, with investors seizing on the data as a sign that the world’s second-largest economy remains on track to meet its official annual target.

China’s gross domestic product expanded 4.5% in the July-to-September period from a year earlier, according to the National Bureau of Statistics. The reading beat the 4.4% forecast in a Reuters poll and accelerated from the 4.3% pace in the second quarter, which was the slowest in more than three years.

Bitcoin traded near $82,500 to $83,000 in early European hours, up about 1.6% over the past 24 hours. Nasdaq futures gained more than 1%, while Japan’s Nikkei rose 1.8% and South Korea’s Kospi advanced 0.6%. Chinese stocks edged up 0.3%. Gold held near $4,180, and the dollar index stayed below 102, near Friday’s lows. Oil prices fell on both sides of the Atlantic, reversing some of last week’s gains.

The upbeat data and lower oil prices “revived investors’ appetite for risk,” CoinDesk reported, noting that the rebound was consistent with the VIX’s historical tendency to normalize after Friday spikes.

**Exports and Imbalances**

The growth acceleration was driven largely by robust foreign demand for Chinese technology goods, even as domestic demand remained weak. China’s monthly trade surplus hit a record $133.5 billion in September, CNBC reported. The country is on track to surpass last year’s record $1.2 trillion trade surplus globally, after logging a 36% growth in exports in September and a $938 billion surplus in the first nine months, according to the Associated Press via Bernama.

September retail sales rose 1.1% from a year earlier, more than double the 0.5% increase expected and up from 0.4% in August. Industrial output grew 5.5%, in line with forecasts and accelerating from 5.2% in August. The urban unemployment rate stood at 5.2% in September.

But fixed asset investment in urban areas fell 7.2% in the first nine months, slightly better than the 7.3% drop forecast. Property investment deepened its decline, falling 20.6% in the January-to-September period compared with 19.9% in the first eight months.

“The prolonged housing slump will continue to limit the spillover from stronger industrial activity to the wider economy,” Sheana Yue, senior economist at Oxford Economics, told CNBC, as Chinese households see their wealth stored in property shrink.

Producer prices climbed at their fastest pace in over four years, rising 5% in September, while consumer inflation remained below 1%, reflecting persistent excess capacity and weak demand.

**Economist Views on Policy Outlook**

The data reduces the immediate pressure on Beijing to roll out aggressive new stimulus, several economists said.

“The GDP growth rate for the first three quarters combined grew by 4.6%, which is still above the lower end of the growth target zone,” Zhiwei Zhang, chief economist at Pinpoint Asset Management, told Reuters. “I wonder if this means that the government doesn’t need to make significant change to the policy stance in Q4 to achieve the growth target for the full year.”

Raymond Yeung, chief China economist at ANZ, said risks remain tilted to the downside. “Weak domestic demand, persistent deflationary pressure and an ongoing property downturn continue to constrain activity,” he told Reuters. “While exports have provided an important buffer, they are unlikely to fully offset softness elsewhere in the economy.”

Ho Woei Chen, economist at UOB, noted that “external demand is still keeping the economy afloat,” adding that broad-based easing is unlikely at this point because growth is still on target.

Andy Ji, Asian FX and rates analyst at ITC Markets, described the growth composition as “deeply unbalanced,” with growth export- and state-led while domestic demand is not self-sustaining and the property sector shows no floor.

“The GDP beat and retail sales surprise reduce the urgency for immediate broad-based easing,” Ji told Reuters, noting that the People’s Bank of China has kept its policy rate steady since a cut in May 2025.

Tianchen Xu, senior economist at the Economist Intelligence Unit, attributed the third-quarter rebound to improved government investment, an “ever-strong” external sector and a weak base, forecasting full-year growth of 4.7%.

**Global Trade and Policy Implications**

China’s reliance on exports has provoked growing anxiety among trading partners. Many fear their domestic industries face increasing threats from a surge of lower-cost Chinese manufactured imports, the Associated Press reported. A deal with the European Union to curb Chinese hybrid-vehicle shipments could also weigh on one of the country’s fastest-growing export industries, Reuters noted.

The Federal Reserve is expected to keep its benchmark borrowing cost unchanged in the 4.75% to 5% range this month after raising rates by 25 basis points last month, according to CoinDesk. A sustained decline in oil prices could ease inflation fears and clear the way for rate cuts.

Chinese authorities have stepped up fiscal support in recent weeks, including a package of targeted rate cuts and mortgage subsidies in late September, and allocated 550 billion yuan of unused debt quota to help ease local government financial strains, CNBC reported. Economists largely expect the PBOC to hold benchmark lending rates unchanged through this year, leaving fiscal measures to do most of the work.

“It is clear that domestic imbalances between supply and demand continue rising,” Eswar Prasad, an economics professor at Cornell University, said in an emailed note.