China's Economy Loses Momentum In Q2, Growth Slows To 4.3% Amid Weak Domestic Demand
China's Economy Loses Momentum In Q2, Growth Slows To 4.3% Amid Weak Domestic Demand Published By, Last Updated: July 15, 2026, 08:57 IST China's economy
China's Economy Loses Momentum In Q2, Growth Slows To 4.3% Amid Weak Domestic Demand Published By, Last Updated: July 15, 2026, 08:57 IST China's economy grew 4.3% in the second quarter, its slowest pace since late 2022, as weak domestic demand offset strong exports despite an AI-driven manufacturing boom. Rapid Read A shipbuilding facility in China as the country's economy slowed in the second quarter. (AFP) China’s economy slowed sharply in the second quarter of 2026, with growth easing to its weakest pace in more than three years as sluggish consumer spending and investment continued to weigh on the world’s second-largest economy despite strong export performance. Official data released by the government showed the economy expanded at an annualised rate of 4.3% during the April-June quarter, down from 5% growth recorded in the first quarter. The latest figure marks China’s slowest quarterly expansion since late 2022. Weak Demand Continues To Hold Back Growth While exports remained a bright spot, domestic consumption and private investment failed to gather momentum, reflecting the continued strain from China’s prolonged property downturn and cautious household spending.
According to AP, economists say the imbalance between strong manufacturing and weak domestic demand has become more pronounced in recent months. The slowdown comes even as Chinese manufacturers benefited from robust overseas demand, particularly for electric vehicles and products linked to the artificial intelligence boom. AP reported that China’s exports rose 17.6% in the first half of the year, helping cushion the broader economic slowdown. High-Tech Exports Drive Manufacturing China’s economic recovery is increasingly being powered by high-tech industries such as AI, robotics and semiconductor manufacturing, sectors that continue to receive strong government support. However, analysts warn that the benefits have not spread evenly across the economy, with traditional manufacturing, services and household consumption continuing to lag behind. Growth Target Still Within Reach Despite the weaker quarter, Beijing has maintained its full-year economic growth target of 4.5% to 5%, slightly below the 5% growth achieved in 2025. The International Monetary Fund recently raised its growth forecast for China to 4.6% for 2026 but expects growth to slow to 4.1% next year.
Attention Turns To The Rest Of The Year Economists believe policymakers may need to introduce additional measures to strengthen domestic demand if the slowdown persists, even as exports continue to support overall growth. Investors will also be watching upcoming policy decisions for clues on how Beijing plans to balance its push for high-tech manufacturing with efforts to revive consumer confidence and investment. (Reuters) News18 Newsletter Handpicked stories, in your inbox A newsletter with the best of our journalism submit Key Questions Answered Will China meet its economic growth target for 2026? China's economic growth target for 2026 is between 4.5% and 5%. The Q2 2026 growth was 4.3%, below the target range. Fitch Ratings expects 4.6% growth for 2026. Beijing has maintained its full-year target despite the slowdown, and the IMF forecasts 4.6%. What measures could boost China's domestic demand? Policymakers may need to introduce additional measures to strengthen domestic demand if the slowdown persists.
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