China’s growth slows to 4.3% as weak spending offsets an export boom

China’s economy grew 4.3% in the second quarter of 2026 compared with a year earlier, the National Bureau of Statistics (NBS) reported on 15 July, down from 5.0% in the first three months of the year. The slowdown left growth for the first half at 4.7% and exposed a widening gap between the country’s busy factories and its cautious households.

According to the bureau’s preliminary estimates, gross domestic product in the first six months reached 69,570.4 billion yuan. Measured against the previous quarter, the economy expanded 0.9% between April and June, compared with 1.3% in the first quarter.

The South China Morning Post reported that the annual figure was the slowest quarterly growth rate since the end of 2022 and fell short of the 4.48% forecast by economists surveyed by Wind, a Chinese financial data provider. Kaohoon International, a Thai financial news service, noted that the reading was below the government’s growth target range for the year of 4.5% to 5%.

Factories ahead, shoppers behind

The detailed figures showed two economies moving at different speeds. Industrial output rose 5.4% in the first half, with high-tech manufacturing up 13.3% and equipment manufacturing up 9.3%. Production of 3D printing devices, lithium-ion batteries and industrial robots grew by 48.5%, 39.3% and 28.0% respectively.

Trade was stronger still. Measured in yuan, exports rose 13.4% in the first half and 20.8% in June alone, while imports grew 22.1% over the six months. The South China Morning Post said exports had remained resilient despite disruption to global shipping routes and energy supplies caused by the war involving the United States, Israel and Iran.

Consumers were far more restrained. Retail sales of consumer goods rose only 1.3% in the first half. They grew 1.0% in June after falling 0.6% in May. Spending on services held up better, increasing 5.3%.

Investment was the weakest area. Fixed-asset investment fell 5.7% in the first half, and investment in real estate development dropped 18.0%. Sales of newly built commercial buildings fell 11.6% by floor area and 13.6% by value. Private investment declined 8.5%.

Prices and jobs

Consumer prices rose 1.0% in the first half, a low rate by international standards at a time when higher energy costs were pushing inflation up in many other economies. Producer prices told a different story, rising 4.1% in June from a year earlier, while the prices manufacturers paid for inputs were up 6.4%.

The urban surveyed unemployment rate stood at 5.0% in June, 0.1 percentage points lower than in May. Per capita disposable income rose 4.2% in real terms in the first half, with rural incomes growing faster than urban ones.

What officials said

The statistics bureau described the economy as having operated “within an appropriate range against pressure”. Its statement was nonetheless candid about the weak points, saying that “the imbalance between strong supply and weak demand remains acute at home” and that “the foundation for economic recovery and improvement still needs to be consolidated”. It also said the external environment was becoming “increasingly unstable and uncertain”.

The bureau said policy at the next stage should “further boost domestic demand” and “step up counter- and cross-cyclical adjustments”, the official terms for using government spending and credit to smooth out the economic cycle. Kaohoon International, citing state broadcaster CCTV, reported that Premier Li Qiang had called for enhanced counter-cyclical measures.

The figures matter beyond China. An economy that produces much more than it consumes at home sends the difference abroad, and the same release showed imports and exports with countries in the Belt and Road programme growing 14.8% in the first half. The second-quarter numbers suggested that this pattern was strengthening rather than fading: mechanical and electrical products, the category that includes electronics and machinery, saw exports rise 20.1%.