China’s manufacturing sector grew faster than the overall economy for a third quarter in a row, underscoring how industry and exports are driving growth in the world’s second-largest economy.

Manufacturing expanded 6.2% last quarter, according to detailed gross domestic product data released on Tuesday.

That was faster than the 4.7% real growth in the overall economy, and kept the sector’s contribution to total activity at 27%, matching the previous quarter’s one-year high.

This strength contrasts with the shrinking real estate sector, which contracted for a fifth quarter in a row, the data showed.

Beijing has in recent years emphasised investing in high-tech manufacturing to drive growth, especially after it tried to reduce financial risk in the economy by puncturing a housing bubble. 

That has helped boost production and exports of goods such as electric cars, batteries and semiconductors, but hasn’t led to a rebound in domestic consumption.

This means companies are more reliant than ever on overseas demand - a source of growth now threatened by rising trade barriers.

Overall economic growth slowed more than expected in the second quarter, data showed on Monday, with the worst performance for retail sales since 2022 undermining activity.

However, overseas demand was a bright spot.

Exports in the second quarter rose to the highest in almost two years, with Chinese companies shipping US$902 billion worth of goods.

  - Bloomberg