China's Q3 Growth Expected to Return to 4% Range... "Real Estate Holds Back"

Q2 Growth Slows to 6.3%
Experts Expect "Bottoming Out and Rebound"

Due to the real estate market crisis, the government's low-intensity policy response, and weather anomalies, China's third-quarter economic growth rate is expected to fall back to the 4% range. However, there is also hope that the Chinese economy, having hit its lowest point, may show a full-fledged recovery going forward.

On the 11th, Chinese economic media Caixin reported that a survey of 15 domestic and international institutions on the third-quarter gross domestic product (GDP) growth rate forecast received responses from 11 institutions, with an average of 4.5%. This represents a 1.8 percentage point drop compared to the second quarter (6.3%) and is the same figure as the first quarter (4.5%) when China fully reopened. The respondents' forecast range was between a low of 4.1% and a high of 5.1%. The actual GDP growth rate will be announced on the 18th.

Wonbin, Chief Economist at Minseong Bank, predicted China's third-quarter growth rate at 4.8%. Economist Won said, "The third quarter showed a trend of being the 'lowest point and the beginning of an upward trend' in economic growth," adding, "In July, macro indicators were lower than expected due to adverse factors such as weather anomalies, and economic measures like the reserve requirement ratio (RRR) cut fell short of expectations." He evaluated, "In August, with announcements of interest rate cuts, support for private economic development, and real estate support, positive factors for economic recovery have increased since September."

Lu Ting, Chief Economist at Nomura China, said, "Economic growth stabilized in September, but the third-quarter performance is relatively cautious," forecasting the lowest 4.1% among respondents. Economist Lu diagnosed, "The rebound in housing transactions in first-tier cities caused a clustering effect in lower-tier cities, exacerbating difficulties in the yuan's depreciation and development in third- and fourth-tier cities." Furthermore, he pointed out, "Although rising international raw material prices have eased deflation, the transition to upstream industries is difficult," and "After the summer travel peak, the recovery in the service sector slowed, and geopolitical tensions remain."

Economist Lu added, "The real estate industry continued to show relative weakness in September, dragging down the growth rate of fixed asset investment," and said, "Short-term infrastructure investment can be supported through special bond issuance, and government industrial policies related to high-tech manufacturing and food safety industries can lead to increased manufacturing investment." He forecast the cumulative investment growth rate for the third quarter to be 3.1%, a 0.1 percentage point decrease compared to the previous year.

Additionally, economists estimated the export growth rate in September at an average of -7.7%, and imports at -5.2%. The trade surplus was expected to be $70.34 billion (approximately 94.33 trillion KRW).

This content was produced with the assistance of AI translation services.