China's economy expanded by 4.3% year-over-year in the second quarter of 2026, recording its slowest pace of growth since late 2022 and highlighting the challenges facing the world's second-largest economy. The latest figures point to a slowdown in domestic demand despite continued strength in manufacturing and exports.

Data released by China's National Bureau of Statistics showed that economic growth eased from 5.0% in the previous quarter, falling below market expectations. Analysts attributed the weaker performance to sluggish consumer spending, a prolonged downturn in the property sector, and softer business investment.

While domestic activity remained under pressure, China's export sector continued to provide support. Strong overseas demand for electric vehicles, batteries, semiconductors, and other high-tech products helped maintain factory output and contributed to a solid trade surplus.

The country's property market, however, remains a significant concern. Falling real estate investment and weaker home sales have continued to weigh on economic confidence, while many households remain cautious about spending due to uncertain employment prospects and slower income growth.

Economists say the latest GDP data highlights the uneven nature of China's recovery. Although industrial production and exports remain resilient, stronger policy measures may be needed to stimulate domestic consumption and stabilize the housing market.

Investors are now watching for additional fiscal and monetary support from Beijing as policymakers seek to achieve this year's economic growth target while addressing long-term structural challenges.

The slowdown in China's economy is also being closely monitored by global markets, as weaker growth in the country could influence international trade, commodity demand, and the broader outlook for the global economy.