Beijing: China’s economic speed has hit a jolt. In the July–September quarter, the country’s GDP expanded by just 4.8%. This is the slowest growth in a year. Trade tensions with the United States and soft domestic demand have left Beijing’s economy exposed. Additional challenges may follow. US President Donald Trump has threatened to impose tariffs up to 100% from November. China’s heavy reliance on exports raises questions about its readiness to tackle structural reforms for long-term sustainable growth.
India, in contrast, is powering ahead. In the first quarter of FY 2025-26 (April-June 2025), it recorded a staggering 7.8% growth. The world now watches the country as a key driver of global economic expansion.
In the third quarter, China’s economy grew at its slowest pace in a year. Weak domestic consumption pushed Beijing to lean heavily on manufacturing and exports. Analysts warn of structural imbalances that could have lasting effects.
GDP data released Monday show China’s third-quarter growth at 4.8%. Expectations suggest the economy might reach roughly 5% growth for the year, potentially with additional stimulus. ING’s chief economist Lin Song highlighted persistent issues: “Weak confidence is limiting consumption, softening investment and property prices remain under pressure. These challenges still need urgent attention.”
Recent export patterns reveal China is shifting trade away from the United States. Exports to America, the world’s largest consumer market, dropped 27% compared to last year. At the same time, shipments to the European Union, Southeast Asia and Africa rose by 14%, 15.6% and 56.4% respectively.
Despite these gains abroad, domestic demand remains sluggish. Retail sales in September fell to a 10-month low. A Reuters survey confirms Q3 GDP growth of 4.8%, down from 5.2% in Q2, aligning with market expectations.
Weaknesses Exposed
Rising trade tensions with the United States have highlighted vulnerabilities in China’s export-dependent economy. The situation suggests Beijing may need to pivot to domestic consumption to stabilise growth.
While September saw some export recovery, most data point to a slowing second-largest economy. Inflation pressures persist despite efforts to rein in overcapacity and maintain competitiveness.
Profitability suffers as China increases exports to non-US markets. Fierce price competition reduces margins, making growth unsustainable until trade tensions ease.
Trump’s threat of 100% tariffs on Chinese goods from November looms large. US officials, however, indicate both sides are open to resolving the tariff dispute.
Challenges And Adaptation
Jeremy Fung, a sales officer for a Chinese aluminum manufacturer, reported a 20% revenue drop. While sales to Latin America, Africa, Southeast Asia, Turkey and the Middle East increased, orders from the United States fell sharply by 80-90%.
Fung said he is learning Spanish to tap non-US markets and now travels abroad twice as often as last year. But these efforts cannot fully offset the US losses.
India’s Moment Arrives
While China struggles with Q3 growth limited to 4.8%, India’s economy accelerates. Strong domestic demand, production-linked incentive schemes and structural reforms drive the country’s rapid pace.
India emerges as a reliable destination for global manufacturing and investment.
China’s property crisis and weak consumer demand are prompting investors to diversify supply chains and capital. This opens an unprecedented opportunity for India to capture a larger share of global exports and investment. The balance of economic power in Asia may now tilt decisively toward India.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: ZEE News
