BEIJING – China’s economy grew faster than expected in the third quarter with industrial activity improving despite Covid-19 restrictions and a property slump, but retail sales weakened.

Gross domestic product grew 3.9% in the July-to-September period from a year ago, stronger than the median estimate of 3.3% growth expected by economists in a Bloomberg survey. It was far better than the 0.4 per cent increase recorded in the second quarter, during the Shanghai lockdown. 

The data was delayed by nearly a week as the country held its 20th party congress – a key political event during which President Xi Jinping secured a third term as head of the ruling Communist Party and consolidated his power.

Industrial production rose 6.3 per cent in September from a year earlier, more than August’s 4.2 per cent rise and beating the 4.8 per cent forecast from economists. Retail sales growth slowed to 2.5 per cent, compared with August’s 5.4 per cent increase and far lower than the 3 per cent estimated. Fixed asset investment rose 5.9 per cent in the first nine months of the year.

China is trying to stage a recovery as the third quarter was threatened by a smattering of smaller Covid outbreaks across the nation that resulted in mobility curbs and which dampened consumer and business confidence. 

During a speech after the close of the congress, Xi said China’s economy is “resilient” and vowed to deepen economic ties with other countries. 

“China cannot develop in isolation from the world. The world’s development also needs China,” Xi said, addressing an audience of Chinese and overseas journalists.

The economy has come under immense pressure, with economists now forecasting growth of just 3.3 per cent for all of 2022 – far lower than an official target of about 5.5 per cent set earlier this year. Officials began downplaying that goal in recent months as it slipped out of reach, instead focusing on job stability and other metrics. BLOOMBERG