Sign Up Log in

    China’s third-quarter GDP growth is projected to be below 5%, leading to calls for more stimulus measures.

    by VT Markets
    /
    Sep 12, 2025
    China’s economy is expected to grow by nearly 5% in the third quarter. However, there are worries about a possible slowdown as the year ends. As winter approaches, there may be increased demands for new policy changes to support growth. While Beijing has recently put some targeted support in place, current data suggests a need for a stronger stimulus.

    Projected Economic Slowdown

    With a third-quarter growth forecast of just under 5%, we are seeing increased pressure on Chinese-related assets. The recent Caixin Manufacturing PMI for August 2025 fell to 49.8, indicating a decline in economic momentum. This situation has already impacted indices like the Hang Seng and CSI 300 in recent trading sessions. This slowdown is also evident in the currency markets, where the offshore yuan (USD/CNH) fell below 7.32 this month. As a result, traders might consider options on commodities that rely on Chinese demand, like iron ore and copper. Purchasing puts on commodity-focused ETFs could help hedge against further industrial weakness. The main factor now is whether Beijing will respond with strong policies, creating significant uncertainty. This concern has led to a rise in implied volatility, with the CBOE China ETF Volatility Index (VXFXI) increasing nearly 15% in the past two weeks. This rise suggests that strategies like long straddles on major Chinese ETFs might be beneficial, as they can profit from significant price movements in either direction.

    Potential Policy Response

    Looking back, we experienced similar slowdowns in late 2023 and 2024. During those times, the government lowered the bank reserve requirement ratio (RRR) and key lending rates. We should keep an eye out for announcements from the People’s Bank of China in the coming weeks. A surprising announcement could serve as a major market catalyst. Create your live VT Markets account and start trading now.

    here to set up a live account on VT Markets now

    In This Article

    see more

    Back To Top
    server
    Click Click Click Click Click
    Follow us on

    Hello there 👋

    How can I help you?

    Chat with our team instantly

    Live Chat

    Start a live conversation through...

    • Telegram
      hold On hold
    • Coming Soon...

    Hello there 👋

    How can I help you?

    telegram

    Scan the QR code with your smartphone to start a chat with us, or click here.

    Don’t have the Telegram App or Desktop installed? Use Web Telegram instead.

    QR code