Beijing: China’s financial pace has hit a jolt. Within the July–September quarter, the nation’s GDP expanded by simply 4.8%. That is the slowest progress in a yr. Commerce tensions with the US and delicate home demand have left Beijing’s financial system uncovered. Extra challenges could observe. US President Donald Trump has threatened to impose tariffs as much as 100% from November. China’s heavy reliance on exports raises questions on its readiness to deal with structural reforms for long-term sustainable progress.
India, in distinction, is powering forward. Within the first quarter of FY 2025-26 (April-June 2025), it recorded a staggering 7.8% progress. The world now watches the nation as a key driver of world financial growth.
Within the third quarter, China’s financial system grew at its slowest tempo in a yr. Weak home consumption pushed Beijing to lean closely on manufacturing and exports. Analysts warn of structural imbalances that would have lasting results.
GDP information launched Monday present China’s third-quarter progress at 4.8%. Expectations recommend the financial system would possibly attain roughly 5% progress for the yr, probably with further stimulus. ING’s chief economist Lin Track highlighted persistent points: “Weak confidence is limiting consumption, softening funding and property costs stay underneath strain. These challenges nonetheless want pressing consideration.”
Latest export patterns reveal China is shifting commerce away from the US. Exports to America, the world’s largest shopper market, dropped 27% in comparison with final yr. On the identical time, shipments to the European Union, Southeast Asia and Africa rose by 14%, 15.6% and 56.4% respectively.
Regardless of these beneficial properties overseas, home demand stays sluggish. Retail gross sales in September fell to a 10-month low. A Reuters survey confirms Q3 GDP progress of 4.8%, down from 5.2% in Q2, aligning with market expectations.
Weaknesses Uncovered
Rising commerce tensions with the US have highlighted vulnerabilities in China’s export-dependent financial system. The scenario suggests Beijing could have to pivot to home consumption to stabilise progress.
Whereas September noticed some export restoration, most information level to a slowing second-largest financial system. Inflation pressures persist regardless of efforts to rein in overcapacity and preserve competitiveness.
Profitability suffers as China will increase exports to non-US markets. Fierce value competitors reduces margins, making progress unsustainable till commerce tensions ease.
Trump’s risk of 100% tariffs on Chinese language items from November looms giant. US officers, nonetheless, point out each side are open to resolving the tariff dispute.
Challenges And Adaptation
Jeremy Fung, a gross sales officer for a Chinese language aluminum producer, reported a 20% income drop. Whereas gross sales to Latin America, Africa, Southeast Asia, Turkey and the Center East elevated, orders from the US fell sharply by 80-90%.
Fung stated he’s studying Spanish to faucet non-US markets and now travels overseas twice as usually as final yr. However these efforts can not totally offset the US losses.
India’s Second Arrives
Whereas China struggles with Q3 progress restricted to 4.8%, India’s financial system accelerates. Robust home demand, production-linked incentive schemes and structural reforms drive the nation’s speedy tempo.
India emerges as a dependable vacation spot for international manufacturing and funding.
China’s property disaster and weak shopper demand are prompting traders to diversify provide chains and capital. This opens an unprecedented alternative for India to seize a bigger share of world exports and funding. The steadiness of financial energy in Asia could now tilt decisively towards India.