China’s economy grew by an unexpected 4.6% in the third quarter from the same quarter a year ago, propelled by retail sales, investment, and industrial output. The latest purchasing managers’ survey of the manufacturing sector echoed these signs of stabilisation. However, property market data – on construction and property transactions – shows an ongoing crisis.
October’s purchasing managers index rose to 50.1, marking the first increase since April 2024 and breaking above the 50 threshold between growth and contraction again (see Exhibit 1). In the struggling real estate segment, however, construction activity and the number of property deals fell by more than 10% year-on-year, though the rate of contraction has been slowing since April.
Beijing’s raft of stimulus measures has reduced the risk that the economy’s official target for 5.0% growth this year will be missed. While further efforts are needed, it appears Beijing is in no hurry to step up measures in anticipation of possible protectionist action by the incoming US administration.
It will likely conserve its firepower to counteract potential damage from the expected sharp increase in US tariffs on imports from China in 2025. Clues on new stimulative policies will likely emerge from the Central Economic Work Conference in December.
