China's economic growth slowed sharply in the second quarter of 2026, with gross domestic product expanding by 4.3 percent year-on-year, according to data released Tuesday by the National Bureau of Statistics.
The sluggish performance, driven by cautious spending from consumers and businesses, threatens Beijing's official annual growth target of 4.5 percent to 5 percent.
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That target is already the lowest set by the government in 35 years.
Chinese Premier Li Qiang flagged potential government intervention to counteract the slowdown and bolster demand during an official address this week, stating that authorities are “preparing and studying additional policies.”
The policy announcement comes as Beijing faces intense pressure to revive household confidence while relying heavily on booming industrial exports to sustain overall economic momentum.
“The authorities appear willing to curb over-reporting and allow published growth to come in near the bottom of their target range.
As a result, we are lowering our forecast for official GDP growth to 4.6pc,” said Julian Evans-Pritchard of Capital Economics.
The analytical firm maintains that its independent gauge, which uses unofficial data, places China's actual economic growth rate closer to 3 percent.
Meanwhile, the domestic demand deficit has caused a surge in cheap exports to international markets, with outbound shipments jumping 27 percent in June alone.
Subsidized manufacturing sectors like electric vehicles, semiconductors, and green technology are offloading excess supply abroad, drawing criticism from the United States and the European Union over trade imbalances.
