China's economy slows to 4.3% in Q2 as domestic demand weakens
Official data released by the National Bureau of Statistics (NBS) on Wednesday showed that the world's second-largest economy expanded by 4.3% between April and June, down from 5% in the first quarter.
China's economy lost momentum in the second quarter of 2026, with growth slowing more than expected as weak domestic demand continued to weigh on the country's recovery.
Official data released by the National Bureau of Statistics (NBS) on Wednesday showed that the world's second-largest economy expanded by 4.3% between April and June, down from 5% in the first quarter. The latest figure is the slowest quarterly growth since the end of 2022 and falls below China's annual growth target.
For the first half of 2026, China's economy grew 4.7% year-on-year, with total economic output reaching around 69.57 trillion yuan (about USD 10.25 trillion).
WEAK DEMAND REMAINS A MAJOR CHALLENGE
The latest figures highlight the gap between China's strong manufacturing sector and weaker domestic demand.
According to the NBS, the economy is facing greater uncertainty from global conditions while household spending remains subdued. Weak consumer confidence and the prolonged slowdown in the property market continue to affect overall economic activity.
Officials also pointed to an imbalance between strong industrial production and soft domestic consumption, suggesting that demand within the country has not recovered at the same pace as manufacturing.
EXPORTS CONTINUE TO SUPPORT GROWTH
Despite weaker domestic demand, exports remained a bright spot for the Chinese economy.
Customs data released a day earlier showed that China's exports jumped 27% in June compared with the same month last year.
Demand for semiconductors used in artificial intelligence data centres helped lift technology exports, while strong global demand for Chinese electric vehicles also supported export growth. Monthly vehicle exports crossed one million units for the first time.
Industrial production also improved, rising 5.3% in June compared with 4.5% in May.
PROPERTY SECTOR CONTINUES TO STRUGGLE
The property market remained one of the biggest drags on the economy.
Investment in the property sector fell 18% during the first six months of the year, worsening from the 16.2% decline recorded in the first five months.
New home prices also continued to fall in June, although the pace of decline slowed to 0.1% from the previous month.
Analysts said many businesses are finding it difficult to pass on higher energy and raw material costs because consumer demand remains weak.
EMPLOYMENT AND OUTLOOK
China's official urban unemployment rate stood at 5% in June. However, unofficial estimates suggest unemployment among people aged 16 to 24 remains above 15%.
Economists said the latest figures show a growing divide between export-led growth and domestic demand. While overseas demand for AI-related products and green technology remains strong, spending within China continues to be affected by the property downturn.
Some experts believe Beijing is unlikely to introduce broad-based economic stimulus in the coming months. However, there could be additional support for infrastructure projects later this year if investment continues to weaken.
Despite the slowdown, Chinese officials maintained that the economy remains broadly stable. The NBS said growth is still in line with the country's annual target and pointed to China's resilience, stable foreign trade, adequate energy supplies and low inflation as factors supporting the economy.
China's economy lost momentum in the second quarter of 2026, with growth slowing more than expected as weak domestic demand continued to weigh on the country's recovery.
Official data released by the National Bureau of Statistics (NBS) on Wednesday showed that the world's second-largest economy expanded by 4.3% between April and June, down from 5% in the first quarter. The latest figure is the slowest quarterly growth since the end of 2022 and falls below China's annual growth target.
For the first half of 2026, China's economy grew 4.7% year-on-year, with total economic output reaching around 69.57 trillion yuan (about USD 10.25 trillion).
WEAK DEMAND REMAINS A MAJOR CHALLENGE
The latest figures highlight the gap between China's strong manufacturing sector and weaker domestic demand.
According to the NBS, the economy is facing greater uncertainty from global conditions while household spending remains subdued. Weak consumer confidence and the prolonged slowdown in the property market continue to affect overall economic activity.
Officials also pointed to an imbalance between strong industrial production and soft domestic consumption, suggesting that demand within the country has not recovered at the same pace as manufacturing.
EXPORTS CONTINUE TO SUPPORT GROWTH
Despite weaker domestic demand, exports remained a bright spot for the Chinese economy.
Customs data released a day earlier showed that China's exports jumped 27% in June compared with the same month last year.
Demand for semiconductors used in artificial intelligence data centres helped lift technology exports, while strong global demand for Chinese electric vehicles also supported export growth. Monthly vehicle exports crossed one million units for the first time.
Industrial production also improved, rising 5.3% in June compared with 4.5% in May.
PROPERTY SECTOR CONTINUES TO STRUGGLE
The property market remained one of the biggest drags on the economy.
Investment in the property sector fell 18% during the first six months of the year, worsening from the 16.2% decline recorded in the first five months.
New home prices also continued to fall in June, although the pace of decline slowed to 0.1% from the previous month.
Analysts said many businesses are finding it difficult to pass on higher energy and raw material costs because consumer demand remains weak.
EMPLOYMENT AND OUTLOOK
China's official urban unemployment rate stood at 5% in June. However, unofficial estimates suggest unemployment among people aged 16 to 24 remains above 15%.
Economists said the latest figures show a growing divide between export-led growth and domestic demand. While overseas demand for AI-related products and green technology remains strong, spending within China continues to be affected by the property downturn.
Some experts believe Beijing is unlikely to introduce broad-based economic stimulus in the coming months. However, there could be additional support for infrastructure projects later this year if investment continues to weaken.
Despite the slowdown, Chinese officials maintained that the economy remains broadly stable. The NBS said growth is still in line with the country's annual target and pointed to China's resilience, stable foreign trade, adequate energy supplies and low inflation as factors supporting the economy.
