China's second-quarter growth slows to 4.3%, missing forecasts as trade tensions rise

China's second-quarter growth slows to 4.3%, missing forecasts as trade tensions rise
22 articles·12 sources·updated about 2 hours ago·View in graph
business & financechinagermanyeuropean union
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China's economy grew by 4.3% in the second quarter of 2026, official data showed on Wednesday. This figure fell short of analysts' average forecast of 4.5% and marked a slowdown from the 5% growth recorded in the first quarter. The world's second-largest economy expanded by 4.7% year-on-year in the first half of 2026.

Foreign trade remained a key pillar of growth, with exports measured in US dollars surging by 27% year-on-year in June, while imports jumped by 36%. However, the export boom has fuelled growing trade tensions, with Germany and the European Union debating how to respond to rapidly rising imports of Chinese goods and excess capacity.

China's domestic economy continued to face pressure. Investment in the property sector fell by 18% in the first half of the year, with the prolonged real estate downturn weighing on consumer confidence and household spending. Industrial production grew by 5.4% in the first six months of the year, according to the statistics office, while retail sales rose by just 1.3%.

Premier Li Qiang called for stronger support for the economy and further measures to stimulate domestic demand during a meeting with experts and business representatives on Monday.

The National Bureau of Statistics attributed the slowdown in growth to "external factors," including the conflict in the Middle East and slower global economic growth. Vice-Commissioner Mao Shengyong noted that the petrochemical industry was particularly affected, while other sectors developed normally.

The value of new home sales fell by 13.6% in the first half of the year, further indicating the pressure on the real estate sector.

The strong demand for Chinese technology exports, particularly semiconductors and electric vehicles, has been a significant driver of growth. Exports of automobiles exceeded one million units for the first time in June, driven by global demand for electric vehicles.

The Chinese government has set a growth target range of 4.5% to 5% for the year, the lowest target since 1991.

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