China’s economy grew slower than expected in the second quarter. The gross domestic product increased by 4.3 percent from April to June compared to the same period last year, as the national statistics office in Beijing announced.
July 15, 2026, 06:58July 15, 2026, 06:58
Analysts had on average expected growth of 4.5 percent. It was the weakest quarterly growth since the end of 2022. In the first quarter the increase was 5.0 percent. In the entire first half of the year, the world’s second largest economy grew by 4.7 percent compared to the previous year.
China’s ruler Xi Jinping.Image: keystone
The numbers paint a picture of an increasingly divided economy. Industry and foreign trade continue to develop comparatively strongly. Consumption, investments and the real estate market, however, remain weak. Strong foreign demand is supporting China’s industry, but has not yet led to a broad domestic recovery.
China’s statisticians were optimistic. The decline in growth in the second quarter was due to “external factors,” said Statistical Office Deputy Commissioner Mao Shengyong. He mentioned, for example, the conflict situation in the Middle East and slower growth in the global economy. In China, the petrochemical industry was particularly affected. However, all other sectors developed normally, he explained.
Production and exports remain strong
According to the statistics agency, industrial production grew by 5.4 percent in the entire first half of the year. In June it increased by 5.3 percent compared to the same month last year. Chinese manufacturers are particularly supported by international demand for semiconductors, computer technology and cars.
China remains strong in exports.Image: keystone
This was also reflected in the trading figures published the day before. In June, exports increased by 27 percent in US dollars compared to the same month last year, and imports increased by 36 percent.
However, the export boom is likely to further exacerbate trade conflicts. Among other things, the EU is discussing how to deal with the rapidly increasing imports of Chinese products and the overcapacity in individual industrial sectors.
Internal market and real estate under pressure
Domestically, however, the situation remains difficult. Retail sales rose by just 1.3 percent in the entire first half of the year. Total fixed investment fell 5.7 percent from January to June.
The weakness in the real estate market is even more pronounced. Investment in the sector fell by 18 percent in the first half of the year. The value of new properties sold fell by 13.6 percent. The downturn in the real estate market is seen as having a negative impact on the confidence and willingness to buy of many households.
According to statistician Mao, a survey conducted by his agency showed that the real estate industry expects housing prices to remain stable or even rise this year. Initial political measures to stimulate demand and reduce the housing stock have had an effect, he said.
Hope for growth through AI
At a meeting with experts and entrepreneurs on Monday, Prime Minister Li Qiang called for greater support for the economy and further measures to stimulate domestic demand. The Chinese government is aiming for growth of between 4.5 and 5 percent for the year as a whole. The half-year growth of 4.7 percent corresponds to the target range for the year as a whole.
Li Qiang, Prime Minister of China.Image: keystone
China is also increasingly promoting future industries such as the development of artificial intelligence (AI) and hopes to achieve further economic growth. The drive for this should come not only from new economic sectors, but also from modernization with AI in traditional industries.
There has long been strong competition among leading tech companies such as Alibaba and Tencent, for example when it comes to integrating AI into their apps. According to statistician Wang Guanhua, IT and business services contributed about a quarter of the economy’s overall growth in the first half of the year. In addition, the global technological change in AI has increased the demand for computer chips enormously, explained Wang. In the first half of the year, China’s industrial companies produced 279.8 billion chips, an increase of 23.1 percent. (dab/sda/dpa)