Overview
- The National Bureau of Statistics reported on Wednesday that GDP grew 4.3% year‑on‑year in April‑June 2026, the weakest quarterly pace since late 2022 and below Beijing’s 2026 target range.
- Domestic demand was the main drag with first‑half fixed‑asset investment down about 5.7% year‑on‑year and property investment plunging roughly 18% in H1, signaling deep strain in the housing sector.
- Exports provided a major offset as customs data showed a roughly 27% jump in June driven by semiconductors, AI data‑centre equipment and electric vehicles, while industrial output rose about 5.3% in June.
- Markets and economists expect policymakers to favour calibrated, targeted fiscal support at the Politburo meeting in late July and do not anticipate aggressive rate cuts from the central bank in the near term.
- External shocks such as higher energy costs and shipping risks tied to the Iran war are raising costs for firms and complicating recovery, and a slowdown in the AI‑led export boom would leave the economy more exposed.