China's economy grows 4.3% in Q2, slowest pace since late 2022: Here's why
&imwidth=600&imheight=450&format=webp&quality=medium "China's economy grows 4.3% in Q2, slowest pace since late 2022: Here's why")
Representative image. Photograph: (Magnific)
The second-quarter performance marked China's slowest economic expansion since late 2022, reflecting mounting pressure from weak domestic demand and external shocks despite steady exports and industrial production.
China's gross domestic product (GDP) grew by 4.3 per cent year-on-year in the April-June quarter, falling short of the expected 4.5 per cent growth forecast. It also marked a slowdown from the 5.0 per cent expansion recorded in the January-March period, according to official data released on Wednesday (July 15, 2026). The second-quarter performance marked China's slowest economic expansion since late 2022, reflecting mounting pressure from weak domestic demand and external shocks despite steady exports and industrial production.
Several media reports that subdued consumer spending and the impact of higher oil prices triggered by the Iran war weighed on economic growth, offsetting gains from manufacturing activity and exports, which continued to benefit from demand linked to artificial intelligence.
China's domestic consumption & private investment
The April-June growth rate was the weakest since the fourth quarter of 2022, when China's economy was affected by COVID-19-related disruptions. On a quarter-on-quarter basis, GDP rose 0.9 per cent during the period, in line with market expectations but slower than the 1.3 per cent expansion recorded in the first quarter.
The latest data indicated that the challenges being experienced by Chinese policymakers as they attempt to regain domestic consumption and private investment, along with maintenance of economic momentum. The report also suggests that a expending supply-and-demand imbalance has emerged, with AI-driven export growth increasing industry output even as household spending and business investment remain subdued.
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Trade data on Tuesday reflected that external demand is compensating for the internal weakness of China, with exports beating expectations with a 27 per cent jump, riding the global AI boom. In response, shipping executives have confirmed that this partly reflects front-loading by US retailers seeking to secure inventories for Black Friday and Christmas holiday sales prior to projected tariff hikes later this year.
