China's economy grew 4.3% year on year in the second quarter, marking one of its lowest quarterly readings since official figures began in the early 1990s and its slowest pace since late 2022. This expansion for the three months to June represents a slowdown from the 5.0% growth recorded in the first quarter. The figure falls below Beijing's annual target range of 4.5% to 5%, the least ambitious goal in decades.
The results reflect a broad slump outside of the country's export-oriented manufacturing strength. Although China benefited from strong exports and production driven by the global artificial intelligence boom, these gains were outweighed by weak domestic demand, lagging consumer spending, business investment, and a prolonged property sector downturn.
External pressures also hindered growth, with trade disruptions and an oil shock tied to the war in Iran impacting the economy. Furthermore, structural problems and geopolitical uncertainty continue to dog efforts to boost domestic consumption.
This economic cooling has increased pressure on Beijing to provide more economic support. While there are questions about whether policymakers will accelerate government spending to meet their annual target, some expect that any fresh stimulus measures will be limited.