China's economy grows 4.3% in Q2, slowest since late 2022

Key developments are emerging from the global stage. Asia China's economy grows 4. 3% in Q2, slowest since late 2022 July 15, 202610:11 AM ET By The Associated Press Heavy equipment and cars are prepared for shipment by rail in Yantai, eastern China's Shandong province, on June 20, 2026. AP/CHINATOPIX hide caption toggle caption AP/CHINATOPIX HONG KONG — China's economy slowed sharply to a 4.

3% annualized pace of growth in the April-June quarter, the government said Wednesday, the weakest in over three years. The official data fell short of forecasts and was far below the economy's strong 5% pace of growth in January-March, despite a surge in exports driven partly by the boom in artificial intelligence, and by robust global demand for Chinese electric vehicles. China has largely shrugged off wider economic impacts from the Iran war as soaring energy prices pushed up global inflation.

The Details

6% in the first half of the year from a year earlier, and 27% in June, according to customs data. Sponsor Message But domestic spending and investment have lagged, limiting the boost from export manufacturing for an economy that has struggled to regain momentum since parts of China were locked down during the COVID-19 pandemic. "This was the slowest growth in any quarter since the lockdown-impacted fourth quarter of 2022," said Lynn Song, chief economist for Greater China at ING Bank in a note.

Some economists say China's economy is becoming increasingly unbalanced as heavy state support and private investments pour into frontier technologies like AI, computer chips and robotics while other areas such as lower-value manufacturing and jobs creating services industries languish. Exports of high-tech products such as electric vehicles, computer chips and other electronic equipment have risen sharply, helped by hefty government support since China's leaders have made development of advanced technologies a top priority. China ran a record $1.

2 trillion global trade surplus last year, drawing complaints from policymakers in other countries over their trade imbalances with the world's second-largest economy. Many have pointed to those heavy state subsidies, which they say contribute to an oversupply of manufactured goods that end up being exported overseas. Industrial output by value rose 5.

What Experts Say

4% in the first half of the year from a year earlier. Sponsor Message As is true in many countries, the expansion of AI and robotics has also raised worries at home over whether businesses will create enough jobs to sustain growth in the longer term. Chinese families have cut back on big purchases, their appetite for spending constrained by a prolonged property slump and uncertainties over jobs and wages.

As China remains reliant on its exports to sustain overall growth, "China's growth model has become increasingly imbalanced," said Eswar Prasad, a professor of economics and trade policy at Cornell University. Substantially increasing domestic demand will be tough as confidence remains weak, he added.

The development has drawn wide international attention, with diplomatic circles watching closely.