China 2026 GDP slowdown

In the first quarter of 2026, China reported a 5.0% year‑on‑year rise in real GDP, driven by a modest rebound in domestic demand and solid external demand, even as deflationary pressures persisted and the property market remained weak. The government reaffirmed its 4.5‑5.0% annual growth target and promised continued stimulus, noting eased trade tensions with the United States.

By the second quarter, growth had decelerated to 4.3%, the slowest rate since late 2022 and below the stated target. Export activity stayed robust, especially in high‑tech sectors, while domestic demand weakened further: retail sales barely rose, fixed‑asset investment fell, and the housing market continued its decline. The automotive sector exemplified the imbalance, with sharp drops in passenger‑vehicle sales and reductions in subsidies. Officials stressed the need to revive consumption and manage ongoing deflationary trends.

Overall, the two snapshots trace a shift from a modest early‑year rebound to a mid‑year slowdown, underscoring the challenges of weak internal demand, persistent price declines, and sector‑specific downturns amid a backdrop of strong export performance.