China’s Economic Growth Slows to 4.3% as Domestic Demand Remains Weak

China’s economy expanded 4.3% year over year in the second quarter of 2026, slowing from 5% in the first quarter and recording its weakest annual pace of growth since the final three months of 2022.

Gross domestic product increased 0.9% from the previous quarter, while economic output for the first half of 2026 grew 4.7% from a year earlier, according to the National Bureau of Statistics.

The slowdown reflected continued weakness in domestic demand, subdued private-sector investment and the prolonged downturn in the property market. Resilient exports of technology and artificial intelligence-related products continued to support industrial activity but were not sufficient to offset softer conditions elsewhere in the economy.

The latest figures highlighted an uneven recovery, with manufacturing and export-oriented industries continuing to expand more strongly than household spending and property-related activity.

The National Bureau of Statistics said external uncertainties remained elevated and noted an imbalance between relatively strong production and weaker demand. The agency described the economy as operating within an appropriate range while acknowledging that pressures and challenges remained.

High-technology and equipment manufacturing provided support during the first half of the year, alongside continued growth in the services sector. Industrial production also benefited from investment in advanced manufacturing, digital infrastructure and technology-related exports.

The second-quarter reading followed stronger growth at the beginning of the year, when China’s economy expanded 5% and manufacturing output increased 6.3%.

The weaker expansion is likely to increase attention on Beijing’s next policy measures as authorities seek to strengthen consumption, stabilize the property sector and support private investment without adding excessive financial risk.

The latest figures reinforce the uneven pace of China’s economic recovery, with policymakers facing continued pressure to strengthen domestic demand while supporting long-term growth.

Source: National Bureau of Statistics of China