Economy
China’s growth slows in Q3 amid trade headwinds, weak demand
China’s economic growth slowed down in the three months to the end of September to mark the weakest pace in a year, authorities said on Monday, as fragile domestic demand left it heavily reliant on manufacturing production and exports, further raising concerns about deepening structural imbalances.
While the 4.8% growth rate met expectations and kept China on track to reach its target of roughly 5% this year, the economy’s dependence on external demand at a time of mounting trade tensions with Washington raises questions over whether that pace can be sustained.
Beijing may be using the headline resilience in growth as a show of strength in talks between its vice premier, He Lifeng, and U.S. Treasury Secretary Scott Bessent in Malaysia in the coming days, as well as a potential meeting between Presidents Donald Trump and Xi Jinping in South Korea later.
Still, that export strength belies weakness on home turf, where lackluster demand gives manufacturers no choice but to fight price wars in foreign markets and compromise on their profitability.
Jeremy Fang, a sales officer at a Chinese aluminum products maker, says his firm lost 20% of revenue as higher sales in Latin America, Africa, Southeast Asia, Türkiye and the Middle East failed to fully offset an 80%-90% order plunge in the U.S.
Fang said he is learning Spanish to get ahead of his Chinese competitors rushing to non-U.S. markets and is now traveling abroad twice as often as he did last year.
But that extra effort isn’t enough. “You have to be ruthlessly competitive on price,” Fang said. “If your price is $100 and the customer starts bargaining, it’s better to drop $10-$20 and take the order. You can’t hesitate.”
This intense competition among Chinese exporters feeds further weakness at home, with many having to cut wages and even jobs to stay in the race.
While industrial output grew to a three-month high of 6.5% year-on-year in September, beating forecasts, retail sales slowed to a 10-month low of 3.0%.
Further hitting consumers by making them feel less wealthy, data also showed new home prices falling at their fastest pace in 11 months in September. Investment in the crisis-hit property sector fell 13.9% year-on-year in the first three quarters.
“China’s growth is becoming increasingly dependent on exports, which are offsetting a slowdown in domestic demand,” said Capital Economics analyst Julian Evans-Pritchard.
“This pattern of development is not sustainable, and so growth is at risk of slowing further over the medium-term unless the authorities take much more proactive steps to support consumer spending.”
Five-year plan in focus
Such calls for structural measures that make China’s economy more reliant on household consumption have grown louder ahead of this week’s key Communist Party meeting, where its elites will discuss the country’s next five-year development plan.
But while the meeting is likely to result in pledges to boost domestic demand, it will also emphasize breaking through technological frontiers and upgrading the country’s sprawling industrial complex as a national security priority.
This could keep the flow of economic resources tilted primarily towards manufacturers at the expense of households.
A change in its growth model would make China a bigger contributor to global demand and might help tone down trade tensions. But there is no sign that Beijing is willing to relent on the industrial front as competition with the U.S. intensifies.
So far, it has been successful in diversifying away from U.S. markets. Its U.S. export sales were down 27% year-on-year last month, but shipments to the European Union, Southeast Asia and Africa grew by 14%, 15.6% and 56.4%, respectively.
And China is using its near-monopoly position in the production of rare earths as leverage to try to extract more concessions from Washington. This prompted renewed threats from Trump to add another 100 percentage points to tariffs on imports from China, but also messages from Washington that the two sides are willing to lower the temperature.
Triple-digit tariffs would effectively place a painful trade embargo on the world’s two largest economies, but Beijing might feel it can bear the pain for longer.
“Relatively speaking, China is in a better position than the U.S.,” said Yuan Yuwei, hedge fund manager at Water Wisdom Asset Management.
“At worst, ordinary people may tighten their belts and some workers are left idle. But in the U.S., if you cut 10-20% of a worker’s salary, people go out into the street to protest. China can suffer for longer than the U.S.”
More stimulus?
Overall, the economy grew 5.2% year-on-year in January-September.
If policymakers feel the economy is veering off target in the fourth quarter, one option is to speed up infrastructure investment, given that they are currently frontloading 2026 debt issuance.
After all, fixed-asset investment shrank 0.5% in January-September from a year earlier, suggesting room for improvement in that area.
Some analysts believe Beijing doesn’t need more stimulus measures this year. But others still see a strong case to offer support to underperforming sectors.
“With China on track to hit this year’s growth target, we could see less policy urgency,” said Lynn Song, chief economist, Greater China at ING.
“But weak confidence translating to soft consumption, investment, and a worsening property price downturn still needs to be addressed.”
Several top energy executives have been dropped from the schedule of a major summit in Riyadh, as Saudi authorities pressed ahead with the event Monday despite deadly attacks on the capital claimed by Yemen’s Iran-aligned Houthis.
The chief executives of ExxonMobil, TotalEnergies, Shell, Chevron and BP had all been expected at the WPC Energy Congress, which began on Sunday, but were no longer on the agenda that conference organizers released early Monday.
“To everyone who traveled to Riyadh, thank you,” said Saudi Energy Minister Prince Abdulaziz bin Salman, who opened Monday’s session of the gathering for energy policy and industry.
“You know this country is safe and that we hold your protection at whole heart…Our gathering here does not mean the risk is gone.”
Prince Abdulaziz said the events of recent weeks were serious and that the kingdom’s response must be “equally serious.”
The strikes are a blow to Vision 2030, Saudi Arabia’s multi-billion-dollar program to diversify the economy away from oil, modernize society and position the kingdom as an investment and tourism hub.
Hosting international events is a priority of the program, which was already facing delays and recalibrations. Prince Abdulaziz said the kingdom must remain focused on the decades ahead and Vision 2030 must continue.
The WPC Energy Congress was originally scheduled for April of this year, but was postponed after the U.S. and Israeli war on Iran began in late February. Saudi Arabia was named host in October 2022, the first time the event, first held in Britain in 1933, has been held in the kingdom.
Chief executives of major energy companies are a regular fixture at WPC Energy events and had been scheduled to speak on stage this week about global oil and gas markets, energy security and the energy transition.
A BP spokesperson said the company had “made every effort to participate” in the conference. “Unfortunately, due to travel disruption, we are unable to be there in person. We greatly value our long-standing partnerships across the region.”
The WPC Energy Congress is taking place this week at a conference center some 10 kilometers (6 miles) from Riyadh’s international airport, which has been attacked four times in the last week.
One person was killed and nearly a dozen hurt in a new attack on the airport on Sunday evening, Saudi authorities reported, a day after a strike claimed by Houthis killed 13 people and wounded more than 300, the deadliest attack in the kingdom in more than a decade.
Upcoming midterm elections in the U.S. stand as a main reason behind the Trump administration’s sudden announcement that Russian diesel would be released immediately to American and global markets, analysts and critics say.
On Friday, U.S. President Donald Trump said he concluded a “highly successful discussion” with Russian President Vladimir Putin and noted it was agreed that Russia would “immediately” supply over 300,000 tons of diesel fuel to the American and global marketplace.
“Another 500,000 Tons during the month of November, and 1,000,000 Tons immediately therafter,” he wrote in a post shared on his Truth Social.
Separately, the U.S. Treasury Department has shared a notice and issued a temporary exemption from sanctions against Russia, permitting the sale, supply, unloading and import of Russian diesel until April 7, 2027.
Russian Deputy Prime Minister Alexander Novak also announced the immediate lifting of Russia’s ban on diesel exports, according to the state news agency Tass.
Record diesel prices
The prices of diesel reached record highs in the U.S., and many advanced economies, including the U.K., France and Germany, in recent weeks amid the ongoing war between the U.S. and Iran in the Middle East and Ukraine’s attacks on Russian energy infrastructure.
U.S. national average diesel prices reached $6.27 per gallon as of October, according to AAA Fuel Prices.
However, with the midterm elections next month, critics argue that the amount of supply volume shared by Trump is insufficient, also suggesting that Russia is likely unable to produce as much at its refineries impacted by Ukrainian attacks.
Before the reported lift on the ban, Russian authorities had recently extended the ban on exports of diesel untill end of October amid the domestic crunch in supplies – a rare case for the country, which before the invasion of Ukraine was one of the top global energy suppliers.
Can deal ease pressure on prices?
The U.S.-Russia deal, which has led to a rebuke by Ukraine and its European allies, such as Germany, raised a question: could it actually help alleviate the recent cost pressures the customers across Europe and the U.S. have been facing?
Following Trump’s announcement, diesel futures in fact dropped, trading about 4.5% lower at $4.67 per gallon. Data from the NY Harbor chart, displaying costs of futures on Oct. 9, showed that the November price dropped by 4.1% to $4.68.
Still, it is unclear how it would reflect on crude oil prices, with tensions in the Middle East and lately between Saudi Arabia and Houthi rebels also weighing on the outlook.
Diesel is a refined product, and additional shipments do not automatically increase crude production.
WTI price settled Friday at $91.85 per barrel, up 0.39%, while Brent crude closed at $104.72, gaining 0.42%. Both benchmarks finished higher despite the initial reaction to Trump’s announcement.
But since diesel is used in logistics and agriculture and coupled with the recent G-7 decision to release additional emergency stockpiles, any drop in prices would be welcomed by farmers and companies, which have voiced dissatisfaction with the current level of prices.
The U.S.-Russia deal was also criticized by Ukrainian President Volodymyr Zelenskyy, after which Trump said the war-torn country needed a new president.
“Allowing Russia to sell petroleum products is an investment in the war, which must be ended, not prolonged,” Zelenskyy wrote on Telegram on Friday evening.
German Education Minister Karin Prien on Sunday also criticized Trump over his call for a new Ukrainian president amid the recent U.S.-Russia diesel agreement.
“For a few liters of diesel. What a moral bankruptcy,” Prien said on X in response to Trump’s remarks.
Trump on Saturday called for Ukraine to “get a new president,” accusing Zelenskyy of repeatedly failing to reach a deal to end the war with Russia.
“I suggest they get a new leader who can make a deal, because he could have made many deals that, for some reason, he never does,” Trump said.
Meanwhile, Germany reaffirmed its commitment to sanctions against Russia on Saturday following the Trump-Putin agreement, according to German media.
The bank accounts of 214 individuals and companies have been frozen as part of the ongoing investigation into funds and asset management companies following the liquidation order by Turkish authorities, with TL 187 billion (about $3.8 billion) in earnings under scrutiny, according to a Sunday report by Sabah newspaper.
As part of an ongoing investigation into investment funds in Istanbul, authorities identified 141 individuals and 73 companies, 214 in total, who reportedly earned more than TL 100 million from three funds, the report suggested.
The Istanbul Chief Public Prosecutor’s Office is said to have sent the list of these individuals and companies to the Savings Deposit Insurance Fund (TMSF), which has begun formally notifying them about the return of their earnings, it added.
Court orders have also imposed travel bans preventing the relevant individuals and company executives from leaving Türkiye.
Moreover, investigators are reportedly tracing where the money went after it was withdrawn from the investment funds.
On Friday, another report said that Turkish prosecutors have identified 214 individuals and companies they say made a combined TL 187.65 billion from three of the investment funds at the center of the country’s fund turmoil.
The Sunday report names Melis Sütşurup Sandal, the wife of Turkish singer Mustafa Sandal.
According to the investigation documents cited in the report, she reportedly earned TL 2.355 billion from Tera’s TLY investment fund, placing her first among the individuals listed.
Her total withdrawals from fund accounts during 2026 reportedly amounted to nearly TL 15.8 billion. As of Sept. 16, 2026, her fund account reportedly held approximately TL 250 million.
The Financial Crimes Investigation Board, known as MASAK, has also begun examining the bank accounts of people who transferred money from their fund investments into their personal bank accounts. Investigators are said to be preparing detailed reports to determine where the approximately TL 187.65 billion ended up.
Authorities launched a sweeping investigation and market intervention last month after suspected price manipulation in a number of thinly traded stocks triggered heavy losses and redemption pressures at investment funds.
The Capital Markets Board (SPK) halted trading in more than 130 funds on Sept. 17. Nearly half a million investors have been affected.
India targets increasing its steel capacity to 604 million metric tons by 2047 from around 220 million tons at present, according a draft steel policy for public consultation released late on Saturday.
Reuters reported last week, citing the draft document, that the policy lays out plans to cut sector emissions and shore up access to iron ore and coking coal, key raw materials, to meet anticipated demand.
The policy aims to cut the sector’s average carbon-emission intensity to around 1.54 tons of carbon dioxide per ton of crude steel by 2047 from the current 2.54 tons, in line with India’s net zero emission goal for 2070, according to the draft document.
The steel ministry expects iron ore demand at 772 million tons and plans to secure access to high-grade reserves by pursuing foreign assets and joint ventures, the document said.
The ministry also expects coking coal demand to reach 236 million tons, the document said, with the government planning to diversify its sourcing via “strategic global outreach” and acquire overseas assets.
Türkiye generated nearly $823 million from vegetable exports from January through September, up 10% from a year earlier, according to a report on Saturday.
Some 651,087 tons of tomatoes, peppers, cucumbers, zucchini, and other vegetables grown in Türkiye found buyers in international markets, according to information compiled by Anadolu Agency (AA) from data provided by the Türkiye Exporters Assembly (TIM).
Fresh vegetable export revenues, which amounted to some $749.15 million between January and September last year, increased by 10% during the same period this year, reaching $822.68 million.
Tomatoes ranked first among fresh vegetable exports, generating $304.16 million in revenue. Peppers followed, bringing in $275.48 million in export earnings.
Compared with the same period last year, revenue from tomato exports increased by 4%, while revenue from pepper exports rose by 29%. Together, these two products accounted for approximately 70% of total fresh vegetable export revenues.
During this period, Türkiye earned $61.38 million from cucumber and gherkin exports, $57.44 million from zucchini exports, and $39.64 million from carrot and radish exports.
Romania largest export market
Romania ranked first among Türkiye’s fresh vegetable export markets, purchasing products worth approximately $147 million.
Germany followed with $132.7 million, while Russia ranked third with $76 million.
During the same period, Türkiye exported fresh vegetables worth $55.48 million to Bulgaria, $49.96 million to Ukraine, and $47.8 million to the Netherlands.
Hayrettin Uçak, the chair of the Turkish Fresh Fruit and Vegetable Exporters’ Associations Sector Board, told Anadolu Agency (AA) that they viewed the increase in export revenues positively, despite changing conditions throughout the vegetable production season.
“Our exports increased by 10% over the previous year during the first nine months, and this success in exports makes us happy,” Uçak said.
“Neighboring and nearby markets are important for our vegetable exports. We need to closely monitor consumer expectations and shopping habits in the European market. Being able to supply buyers with the products they want, in suitable packaging and on time, plays a decisive role in commercial relationships. In this respect, we consider the growth in exports to Romania and Germany particularly important,” he added.
The scent of fragrant herbs and spices drifts through Tehran’s bazaar, but business is far from brisk. Shopkeeper Nasir says locals who once purchased nuts by the kilo are buying less as the U.S.-Iran war-driven price increases squeeze demand and push traders to the brink.
The marketplace in the Iranian capital’s north would usually be abuzz with customers, but shops now sit mostly empty with only small numbers of people walking its old narrow paths, a jarring shift for the sellers shouting to promote their goods.
“There used to be customers who bought 2 to 5 kilograms. Now, they’re down to buying one kilogram or half a kilogram,” said the 61-year-old.
“Prices are truly high. We all know it, and it would be a lie to say otherwise.”
Nasir called on authorities to stabilize the currency so businesses could plan ahead.
“We’re left in limbo; everyone is,” said the fruit and nut seller.
“They need to stabilize the dollar exchange rate.”
Iran’s economy has been battered by years of sanctions, but the conflict that began in February with U.S.-Israeli attacks and an American blockade of the country’s ports has put extra strain on daily life.
Rising inflation, nearly 90% year-over-year in September according to official figures, and erratic currency exchange fluctuations have driven up the cost of everyday items. Food prices have more than doubled since last year.
At the bazaar, a historic covered market in Tehran’s Tajrish square, locals surrounded by Iranian flags and Persian signage try to escape the economic gloom, scanning sweets, jewellery, traditional garments and cuts of meat before their weekend begins.
In an alley, a street artist plays a guitar while another drums his hands on a box to draw tips from passersby.
‘Just need stability’
But across the commercial district, many struggle to see a future for their businesses.
“It is a desperate, last-ditch struggle. Manufacturers are going bankrupt, laying off staff and closing shops, and the impact inevitably reaches us,” said Ali Nowruzi, 36, who runs a sportswear shop in the bazaar.
The businessman now orders only a few items for display on his shop’s shelves to stop them from looking bare like his warehouse, which he says lies empty due to lack of demand.
“We have absolutely no plan for the future. When people don’t come to buy … it effectively spells bankruptcy for the business,” he said, citing rising rent and utility bills.
“We just need some stability.”
Many shoppers, whose purchasing power has weakened since the outbreak of war, are seen leaving the bazaar without buying anything.
Azadeh, a 45-year-old woman currently out of work, says she just goes there to “watch the shops”.
Mounting pressure over the war saw Iran’s gross domestic product (GDP) contract 10.1% year-over-year between late March and late June, according to official figures.
The rial traded at around 2.7 million to the dollar on the unofficial market in the past week, compared with about 1.7 million before the war.
The minimum monthly wage that stood at around $120 a year ago has fallen to $65.
The country’s economy minister has rejected predictions of an imminent economic collapse, accusing Iran’s foes of trying to fuel public anxiety and drive up exchange rates.
Prices ‘skyrocketed’
Azadeh offers a price comparison of a kitchen cloth bought several months ago for 22 cents. She says that the item now costs $1.10, five times more.
“It shows that prices haven’t just gone up; they’ve truly skyrocketed,” she said.
She has stopped buying some fruits and says she can no longer afford holidays.
“We aren’t meant to just exist, we’re meant to actually live, right?” she asked.
Car mechanic Mojtaba Rezaei says his customers have “dropped to a 10th of what it was” because “goods now cost two or three times as much.”
“I actually feel embarrassed telling prices to customers. People just come in, ask the price, and leave,” the 57-year-old told Agence France-Presse (AFP) at the bazaar.
“So many things – buying clothes, going out for leisure, dining at restaurants – have all been cut out of our lives.”
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