China’s economic engine cooled more sharply than expected in the third quarter, as a rekindled trade rift with the United States clouded one of the few bright spots in the global economy.
According to data released on Monday, the world’s second-largest economy expanded by 4.8% in the three months ending September, compared with the same period in 2024 — its slowest pace in a year. The decline comes just as Beijing tightened controls on exports of rare earth minerals, materials vital to global electronics manufacturing, drawing a swift and pointed response from Washington.
President Donald Trump threatened a 100% tariff hike on Chinese imports after Beijing’s move, a measure that risks reigniting a full-blown trade war between the two economic giants. The tension erupted only months after both sides had signaled a fragile truce aimed at stabilizing global supply chains.
China’s National Bureau of Statistics struck an optimistic tone despite the turbulence, saying the economy continued to show “strong resilience and vitality.” Growth, it said, was anchored by a rebound in the country’s technology and business services sectors, where firms in 3D printing, robotics, and electric vehicles have outperformed expectations.
Even so, the 4.8% growth rate marks a slowdown from the 5.2% recorded in the previous quarter. It also lands days before a high-level Communist Party meeting where policymakers are expected to outline China’s next five-year economic blueprint, covering 2026 to 2030.
Beijing has set a modest “around 5%” growth target for 2025, a sign of caution amid ongoing property market weakness, sluggish domestic consumption, and volatile foreign trade. Still, exports to the US climbed 8.4% in September, underscoring the complexity of a relationship that remains both adversarial and economically intertwined.
In Washington, Treasury Secretary Scott Bessent said he would meet Chinese officials in Malaysia this week to “ease tensions” and lay the groundwork for a possible meeting between Trump and President Xi Jinping.
Whether diplomacy can steady the world’s two largest economies remains uncertain. For now, markets are watching closely — aware that another round of tariff battles could ripple far beyond Beijing and Washington, unsettling a global economy already struggling to find balance.
