In China, the3rd quarter was characterized by low economic activity.

The Chinese economy slowed down in the third quarter, but not as much as expected, thanks to a recovery in consumer demand, while an unprecedented crisis in the real estate market is negatively impacting the activities of the world's second-largest economy.

For two decades, real estate in Shanghai has accounted for a quarter of China's gross domestic product (GDP), serving as an important source of jobs and sustaining thousands of companies. The sector has experienced explosive growth over these twenty years. However, the financial troubles of emblematic real estate companies (Evergrande, Country Garden...) have fueled buyer distrust, due to unfinished apartments and falling prices per square meter.

According to the National Bureau of Statistics (NBS), China's GDP grew by 4.9% in the third quarter compared to the same period last year. This is lower than the previous quarter (+6.3%). Analysts surveyed by AFP had expected a more significant slowdown (+4.3%).

However, some indicators have started to improve. Retail sales, a key measure of consumer demand, significantly accelerated in September (+5.5% compared to the same period last year), according to the NSB. This pace exceeds the figures from August (+4.6%) and the forecasts of analysts surveyed by Bloomberg (+4.9%). The revival of tourism at the end of September due to the national holiday (October 1) contributed to this improvement.

"The Chinese economy is beginning to show signs of stabilization after a series of stimulus measures, particularly in the consumption sector."

Economist Ken Cheung from the Japanese bank Mizuho notes that families are still spending cautiously, and expenditures remain below pre-Covid-19 pandemic levels. "Domestic demand remains insufficient, and it is necessary to strengthen the foundations of economic recovery," said NSB representative Sheng Laiyun at a press conference.

Production at enterprises maintains a growth rate consistent with the previous month (+4.5% in September). Analysts had expected a slight slowdown (+4.4%). The unemployment rate, which in China is calculated only for the urban population and provides only a partial view of the labor market, decreased in September to 5% (compared to 5.2% in August). The unemployment rate among individuals aged 16 to 24, which reached a record high in June (21.3%), is no longer published.

As for fixed capital investments, their growth since the beginning of the year reached 3.1% by the end of September, which indicates a slight slowdown compared to August (3.2%).

Official growth figures in China, which are heavily politicized and often questioned, always attract attention given the weight of this Asian power in the global economy. However, they can be misleading because comparisons are always made with the same period from the previous year. Nevertheless, compared to the previous quarter, which is a more realistic basis for comparison, the growth of the Chinese economy is accelerating to +1.3% after +0.8% in April-June. China aims to achieve "around 5%" growth this year, which some economists believe may be challenging without a large-scale stimulus plan, while the government prefers targeted measures.

“Stronger measures will be required,” said analyst Gene Ma from the Institute of International Finance (IIF). Last year, China’s GDP grew by 3%, which is significantly different from the official target of 5.5% and is one of the lowest figures in the last four decades. “The hardest part is already behind for the economy, but recovery still faces obstacles,” warns economist Larry Hu from investment bank Macquarie. Country Garden, one of the largest players in the real estate sector, may officially face its first payment default on Wednesday. The previously financially stable company failed to pay interest on a loan of $15.4 million (€14.6 million) last month. The 30-day moratorium on debt repayment expired at 12:00 PM (04:00 GMT). So far, Country Garden has not announced its plans.