China's Economic Growth Slows to 4.3% in Q2 as Consumption Weakens
China’s real economic growth slowed to 4.3% year-on-year in the second quarter of 2026, down from 5.0% in the first quarter, according to official data released by the National Bureau of Statistics (NBS) on Wednesday. This marks the slowest growth rate since the fourth quarter of 2022, when the country was grappling with the COVID-19 pandemic. The quarterly figure fell short of the government’s annual target range of 4.5% to 5.0%.
On a quarter-on-quarter basis, gross domestic product (GDP) rose by 0.9%, a slowdown from the 1.3% growth recorded in the January-March period. Despite the weaker second quarter, first-half GDP growth reached 4.7% year-on-year, remaining within the government’s target range. The NBS stated that the domestic economy was ‘running within an appropriate range’ in the first half of the year, supported by ‘high-quality development activities with new and positive momentum.’ However, the bureau cautioned that the external environment is becoming increasingly unstable and uncertain, and that the domestic imbalance between strong supply and weak demand remains acute.
The data was released shortly after the government set a target to increase total retail sales of consumer goods to around 60 trillion yuan by 2030, a 20% increase from the 2025 target. In the first half of 2026, retail sales of consumer goods rose by just 1.3% year-on-year to 24.87 trillion yuan. The weakness in domestic demand was further reflected in fixed-asset investment, which fell 5.7% year-on-year, dragged down by an 18.0% plunge in real estate development investment. In contrast, the external sector performed strongly, with total industrial exports surging 13.4% and imports jumping 22.1%.
Premier Li Qiang stated on Monday that economic efforts in the second half of the year would ‘directly affect the achievement of annual development goals’ and called for the full and effective use of existing policies to consolidate economic momentum. The International Monetary Fund recently projected that China’s economy would slow to 4.6% this year from 5.0% in 2025, with a further deceleration to 4.1% expected in 2027.