China's economic growth slows to weakest pace in over three years
Summary
China's economic growth slowed to its weakest level in over three years in the second quarter of 2026, expanding by 4.3% compared to the same time last year. While exports have grown strongly due to global demand for AI-related products, problems like a struggling property market and weak domestic spending have slowed overall growth.Key Facts
- China’s economy grew by 4.3% year-on-year from April to June 2026, the slowest pace since late 2022.
- The growth missed economists’ forecast of 4.5% and fell short of Beijing’s 4.5% to 5.0% annual target.
- Strong exports driven by global demand for AI chips and computing equipment helped offset other economic challenges.
- Domestic problems include a long-lasting property market crisis and reduced spending by Chinese consumers.
- Trade disruptions caused by the war in Iran, especially around the Strait of Hormuz, affect China’s energy imports.
- Retail sales grew 1.0% in June year-on-year, better than expected, and industrial production rose 5.3%.
- Fixed-asset investment declined by 5.7% in the first half of 2026, signaling less investment in infrastructure and businesses.
- Analysts expect the government to focus more on boosting domestic spending later in 2026 and early 2027.
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