South Korea Q3 GDP grows 1% on chip exports; China industrial profits up 14.4%

The South Korean economy grew 3.4% in the July-September period from a year earlier, after a 3.7% annual gain in the second quarter, according to the BOK's advance data reported by Yonhap. The third-quarter quarterly pace accelerated from 0.6% in the previous quarter. The BOK said GDP had grown a cumulative 3.6% over the first three quarters of 2026. "If the economy maintains the on-quarter growth pace in the fourth quarter, GDP will likely grow 3.6 percent for the full year," Lee Dong-won of the BOK's statistics department said. "If fourth-quarter growth reaches 1.4 percent on-quarter, the annual growth rate could reach 4 percent."

South Korea's exports rose 2.3% from the previous quarter and imports increased 2.4%, while government spending advanced 1.9%. Net exports contributed 0.1 percentage point to quarterly GDP growth and domestic demand added 0.9 percentage point. Facility investment increased 4.1% and construction investment climbed 0.7%, but private consumption fell 0.2%. The BOK attributed the consumption decline to reduced spending on financial services during a stock market correction and sluggish automobile sales caused by general strikes at major automakers; without those factors, private consumption could have risen 0.4%, the central bank said.

South Korea's outbound shipments topped a record $120.9 billion in September, up 83.5% from a year earlier, with semiconductor exports exceeding $60 billion, according to the Yonhap report. Real gross domestic income rose 18.8% from a year earlier in the third quarter, the highest since the fourth quarter of 1977. The BOK may raise its 3.3% growth forecast made in August, with new predictions due next month.

China's industrial profits rose 14.4% last month from a year earlier, and climbed 15.5% in the first nine months of the year, CNBC reported. Industrial earnings swung to double-digit growth earlier this year after a modest gain in 2025 that followed three straight years of declines, helped by Beijing's efforts to curb price wars and by surging demand for AI-related equipment. The global AI boom and higher commodity prices stemming from the war in Iran lifted earnings at miners, chipmakers and raw-material suppliers, while downstream manufacturers faced rising input costs and weak domestic demand. Earnings growth in high-tech sectors such as AI and robotics outperformed profits in consumer-related industries including clothing, autos and furniture.

China's economy expanded 4.5% in the third quarter from a year earlier, slightly faster than the previous quarter, taking growth in the first nine months to 4.6%, within the government's full-year target range of 4.5% to 5%. Retail sales grew 1.1% in September, beating forecasts but only marginally above August's weak reading. With concerns over local government debt and fading consumer trade-in subsidies, Beijing has held back from major new stimulus for domestic demand. Shena Yue, senior economist at Oxford Economics, said high-tech manufacturing investment and electronics capacity utilization remain resilient, supported by the global AI cycle and domestic policy priorities, while overall investment and industrial utilization are still subdued. Household demand is the weak link as the property downturn weighs on housing purchases and related durables, she said. "China's export strength isn't able to fully offset its domestic weakness," Yue said.