China's economy grew by 4.3% in the second quarter, marking the slowest pace of expansion since late 2022 due to weak domestic demand and a persistent property market slump.

Key Points

• China’s GDP growth slowed to 4.3% in the April-June quarter, falling short of the 5% pace recorded in the first quarter of the year.
• Exports surged 27% in June, driven by strong global demand for electric vehicles, computer chips, and robotics.
• Retail sales grew by a meager 1.3% in the first half of the year as families reduced spending amid job and wage uncertainty.
• Fixed asset investment declined by 5.7% year-on-year during the first half of 2026.
• The government maintains an annual growth target of 4.5% to 5% despite an acute imbalance between strong industrial supply and weak domestic consumption.

Why it Matters

The reliance on high-tech exports to drive growth has created an unbalanced economy that remains vulnerable to global trade tensions and domestic stagnation. If China fails to stimulate internal consumer demand, the country may struggle to meet its long-term growth targets and address rising unemployment.