China’s GDP growth decelerated to 4.3% year-on-year in the second quarter of 2026, the National Bureau of Statistics reported on Wednesday. That’s the weakest reading since Q4 2022, and it fell short of the 4.5% consensus forecast that analysts had penciled in.
The number also represents a sharp step down from the 5.0% pace recorded in the first three months of the year. On a quarter-on-quarter basis, growth slowed to 0.9%, down from 1.3% in Q1, marking the softest sequential expansion since Q2 2024.
For a government that set a full-year GDP target range of 4.5% to 5.0%, the first-half average of 4.7% leaves almost no room for error in the back half of the year.
What’s dragging China down
The culprit is familiar: domestic demand remains stubbornly weak. Consumer spending and private investment continue to feel the gravitational pull of China’s prolonged property sector slump, which has erased household wealth and dampened confidence for years now.
