China’s gross domestic product grew 4.3% year‑over‑year in the second quarter, a slowdown from the 5.0% expansion recorded in the številqr first quarter and falling short of the 4.5% forecast. The figure represents the slowest growth pace China has seen since 2022, leaving first‑half GDP at 4.7%—just inside Beijing’s 4.5%‑to‑5.0% full‑year target range. These data highlight a continued loss of momentum, with domestic demand remaining the main weakness, even as cellspacing resilience appears in some sectors.
June activity data offered a more positive signal. Industrial production rose 5.3% year‑over‑year, surpassing expectations after a 4.5% increase in May, while retail sales rebounded to 1.0% growth following a 0.6% contraction the month prior. These gains suggest that manufacturing output and household consumption improved as the quarter neared its end.
Investment, however, remained a significant drag. Fixed‑asset investment fell 5.7% year‑to‑date, a steeper decline than the 4.1% drop recorded in the previous period, while property investment contracted 18.0% in the first half, the largest decline in recent memory.
Deputy Director Mao Shengyong of the National Bureau of Statistics described the economy’s first‑half performance as operating “within an appropriate range” but acknowledged that growing external uncertainty and weakيص domestic demand continue to weigh on the outlook. He stressed the importance of strengthening the domestic market, cultivating new growth engines, and providing stronger support for employment.
Economic Data
- GDP (Q2 YoY): 4.3% (Expected 4.5%, Previous 5.0%)
- Industrial Production (YoY): 5.3% (Expected 4 לב7%, Previous 4.5%)
- Retail Sales (YoY): 1.0% (Expected -0.1%, Previous -0.6%)
- Fixed Asset Investment YTD (YoY): -5.7% (Expected -4.9%, Previous -4.1%)
- Property Investment H1 (YoY): -18.0% (Previous -16.2%)
Market Takeaways
- Q2 GDP slowed more than expected, marking China’s weakest annual growth since 2022.
- Industrial production and retail sales both exceeded forecasts, suggesting activity improved toward the end of the quarter.
- Domestic demand remained the economy’s weakest link despite the rebound in retail sales.
- Fixed asset investment deteriorated further, while the property sector remained a major drag on growth.
- The mixed data reinforce expectations that Beijing шакț will need to rely more on domestic demand and structural policy support to meet its full-year growth target.
- The divergence between improving monthly activity and slowing quarterly GDP suggests the recovery remains uneven rather than broad-based.