China Beats Q3 Forecasts at 4.5% and Deploys Mortgage Subsidies Plus a Bond-Market Backstop
Q3 GDP grew 4.5% YoY, beating forecasts, as exports surged 36.3% in September; Beijing launched mortgage interest subsidies on Oct 1 and the PBOC unveiled a liquidity backstop for non-bank institutions.
China's economy grew 4.5% year-over-year in the third quarter, ahead of the 4.4% consensus, lifting first-three-quarter growth to 4.6% and keeping the official 4.5%-5% target within reach. September exports jumped 36.3%, with mechanical and electrical products dominant, while industrial production rose 5.5%.
The composition remains the story: fixed-asset investment fell 7.2% for the first nine months with property development down 20.6%, and September retail sales rose only 1.1%. Policy is responding on two fronts — mortgage interest subsidies for first-time buyers that began October 1 (a 1-percentage-point annualised subsidy, up to five years), and a PBOC liquidity support tool for non-bank financial institutions facing mass withdrawals, designed to prevent a bond-market fire sale.
Producer prices rose 5.0% year-over-year in September on imported commodity inflation, while consumer prices rose just 0.9% — a scissors gap that shows upstream cost pressure has yet to pass through to households. The PBOC also signalled further rate reform and approved China's first 18 actively managed ETFs.
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