GDP growth eased to 4.8% yoy in Q3 but it would still put China’s economy on track to meet the 5% official target. Growth was mainly supported by strong exports as household consumption slowed and fixed investment faltered, Commerzbank's economist Tommy Wu reports.

Growth in China has been uneven

"While China’s Q3 GDP expanded 4.8% yoy, beating our expectation, it disguised the underlying weakness in domestic demand. Admittedly, GDP in the first three quarters grew 5.2% yoy and this puts China’s economy on track to meet the official 5% target goal. However, growth was mainly supported by strong exports. Household consumption growth slowed and fixed investment contracted."

"In nominal terms, GDP growth slowed to just 3.7% yoy, much lower than the real growth figure as China experienced the 10th consecutive quarter of deflation, acco,rding to our estimated GDP deflator. This also highlights the continued weakness in domestic demand and the impact of “involution” (excessive and destructive, race-to-the-bottom competition)."