China’s economic growth is slowing as trade tensions with the US rise

China’s economic growth slowed in the three months to the end of September as trade tensions with the US flared.

The world’s second-largest economy grew 4.8 percent from the same period in 2024, its slowest pace in a year, official figures released on Monday’s show.

The data comes after China imposed extensive controls on the export of rare earth elements – minerals essential to global electronics production, a move that rattled the fragile trade truce with the US.

Third-quarter gross domestic product (GDP) growth will set the tone for a meeting of China’s top leaders this week to discuss the country’s economic plan between 2026 and 2030

Growth of 4.8% in the third quarter slowed to 5.2% in the three months to July.

China’s National Bureau of Statistics said the economy is showing “strong resilience and vitality” against pressures. It identified momentum in its technology sector and business services as key growth drivers.

Beijing has targeted “around 5%” economic growth this year and has so far avoided a sharp downturn, helped by government support measures.

US President Donald Trump reacted quickly to China’s control of rare earth elements by threatening to additional 100% tariffs on imports from China.

US Treasury Secretary Scott Bessent said he expected to meet with Chinese officials this week in Malaysia in an effort to ease tensions and arrange a meeting between Trump and his counterpart Xi Jinping.

Before the recent outbreak, Chinese firms took advantage of the trade truce with Washington to ship goods to the US, which led to an 8.4% rise in China’s exports in September. The total value of imports into China has also increased.

China’s industrial production rose 6.5 percent last month from a year earlier, with 3D printing, robotics and electric vehicle makers among the best performers.

The service sector, which includes IT support, consulting and transport and logistics companies, has also grown.