China’s economic growth has shown signs of slowing down amid rising trade tensions with the United States. In the third quarter of 2024, the world’s second-largest economy recorded a gross domestic product (GDP) growth of 4.8%. This figure marks the lowest rate in a year, a noticeable decrease from the 5.2% growth reported earlier in July.
Details of China’s Economic Performance
Official statistics released on Monday indicate that the decline in growth aligns with increased trade frictions following China’s new export controls on rare earth minerals. These minerals are critical for global electronics production and pivotal to the fragile trade accord with the US.
Impact of Export Controls and Trade Tensions
- China imposed restrictions on rare earth exports, affecting global supply chains.
- US President Donald Trump threatened additional 100% tariffs on Chinese imports in response.
- US Treasury Secretary Scott Bessent plans to meet Chinese officials in Malaysia to negotiate easing tensions.
The decline in China’s GDP growth is particularly significant as it comes just before a gathering of top Chinese leaders. This meeting will focus on shaping the nation’s economic strategy from 2026 to 2030.
Growth Drivers Despite Challenges
Despite the slowdown, China’s National Bureau of Statistics remarked on the economy’s “strong resilience and vitality.” Several sectors contributed positively to growth, notably:
- Technology sector
- Business services
The current government has set an annual growth target of approximately 5% for this year. Support measures have, thus far, mitigated the effects of potential economic downturns.
Trade Statistics and Sector Performance
Before the recent flare-up in trade relations, Chinese enterprises utilized a trade truce to boost exports to the US, resulting in an 8.4% rise in September shipments. Noteworthy statistics include:
| Indicator | Growth Rate |
|---|---|
| GDP Growth (Q3 2024) | 4.8% |
| GDP Growth (Q2 2024) | 5.2% |
| Industrial Output Growth | 6.5% |
China’s industrial output saw robust growth, particularly in sectors such as 3D printing, robotics, and electric vehicles. The service sector, which encompasses IT support, consulting, as well as transport and logistics, also exhibited significant gains.
