BEIJING—China's economy expanded 4.7% in the first half of 2026, official data showed on Wednesday, as second-quarter growth slowed more than expected, underscoring persistent weakness in domestic demand despite resilient manufacturing and exports.
Data released by the National Bureau of Statistics (NBS) showed gross domestic product grew 4.3% year-on-year in the April-June quarter, down from 5.0% in the first quarter and below the 4.5% increase forecast by economists in a Reuters poll. On a quarterly basis, the economy expanded 0.9%, matching market expectations but slowing from 1.3% growth in the previous quarter.
The second-quarter performance marked China's weakest annual growth rate since late 2022, when the country was emerging from strict COVID-19 restrictions, according to official data and Reuters calculations.
The NBS said the economy remained broadly stable in the first half despite mounting external challenges, but acknowledged that the international environment had become more complex and that the imbalance between supply and demand remained pronounced. The statistics bureau said more proactive and effective macroeconomic policies would be needed in the second half of the year.
Official figures showed industrial output continued to outperform consumer-related indicators. Industrial production rose 5.3% in June from a year earlier, while retail sales increased 1.0%, recovering from a decline in May but remaining subdued. Fixed-asset investment fell 5.7% in the first six months of the year, reflecting continued weakness in the property sector and private investment. Property investment contracted 18% during the period, according to official statistics.
China's export sector has remained comparatively resilient, supported by demand linked to artificial intelligence technologies and front-loading of overseas shipments ahead of possible tariff increases. However, economists have warned that slowing global demand, renewed trade tensions and geopolitical uncertainty could reduce that support in coming months.
Analysts said the latest figures highlighted the challenge facing policymakers as they seek to revive household spending while managing elevated local government debt and a prolonged property downturn. Although Beijing has introduced measures to stimulate consumption and stabilize growth, many economists say stronger domestic demand will be necessary to offset potential weakness in exports if external conditions deteriorate further.
The Chinese government has set an economic growth target of about 4.5% to 5.0% for 2026. Wednesday's data leaves policymakers under pressure to strengthen support measures as they aim to keep growth within that range during the second half of the year.
