China's Q2 GDP growth slows to 4.3%, missing target amid weak demand

China’s economy expanded by 4.3% year‑on‑year in the April‑June quarter, the slowest pace since late 2022 and below the 4.5% forecast of economists. The figure also missed Beijing’s own 2026 growth target of 4.5‑5%. Over the first half of 2026 the GDP rose 4.7%.

Exports surged, rising 27% in June on strong demand for AI‑related equipment, semiconductors and electric vehicles, while industrial production grew 5.4% in the first half and 5.3% in June. Retail sales showed only modest improvement, up 1% in June after a 0.6% decline in May, and 1.3% for the whole six‑month period.

Domestic demand remained weak. Fixed‑asset investment fell 5.7% in the first six months, with property‑related investment plunging 18%. Housing inventory in major cities has stabilised; months of supply sit around 24‑27 months, and new‑home prices in first‑tier cities slipped 0.1% in June.

Oil refining activity contracted sharply, with June crude‑throughput dropping 17.7% year‑on‑year to 51.2 million tonnes – the lowest level since March 2020 – and crude imports falling 41% to a near‑decade low, reflecting weak domestic fuel demand and export restrictions amid the Iran war. Urban unemployment held at about 5%.

The data underline a growing split in China’s economy: export‑driven manufacturing remains robust, while consumption, housing and investment lag, prompting analysts to watch for policy steps ahead of the Politburo meeting later this month.