China’s economy expanded in the third quarter of 2025. However, the pace of growth was slower than the previous quarter and weakest since the third quarter of 2024. Trade tensions with the US and muted domestic demand continued to weigh on growth over the quarter. Officials from the US and China are expected to meet later this week to discuss trade, and the Presidents of both countries are expected to meet later this month.

• China’s economy grew by 4.8% year-over-year in the third quarter of 2025. This was down from the 5.2% rate of annual growth in the second quarter but did top economists’ expectations of 4.7%, based on a Bloomberg survey. China’s government did note that year-to-date growth puts it on track to meet its 2025 target of 5%.
• Strong exports helped drive growth over the quarter. While exports to the US declined amid heightened trade tensions, China was able to increase shipments to other countries around the world.
• Muted domestic demand lingered, weighing on overall growth. Annual retail sales growth slowed each month during the quarter.
• The US and China are expected to meet in the coming days. US President Donald Trump outlined some of his demands, including no more restrictions on rare earths and China purchasing more soybeans from the US.
• While unease about the global economy lingers, Canadian consumers remain uncertain about Canada’s economy. The latest consumer confidence survey from Bloomberg Nanos showed more than half of Canadians are worried about the strength of the economy over the next six months.

Until a trade deal with the US and China is finalized, global economic uncertainty is likely to persist. This could mean some volatility in financial markets if both sides cannot smoothly progress to a deal. Canada is also facing some uncertainty, but the government has been working to diversify trade and find support measures for industries hurt by US tariffs.

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