China's economy grew more slowly than expected in the three months to June, official figures show, adding to pressure on Beijing to do more to shore up demand.
Gross domestic product expanded 4.3% from a year earlier in the second quarter, according to the National Bureau of Statistics, below the roughly 4.5% economists had forecast and down from 5% in the first quarter. It was the weakest quarterly reading since the final months of 2022. For the first half of the year, growth was around 4.7%, still broadly in line with the government's full-year target of about 5%, though the loss of momentum was clear.
Weak demand at home
The slowdown reflects persistent softness in China's domestic economy. Consumer spending has been subdued: retail sales rose just 1% in June, a modest rebound after a rare fall the previous month, as South China Morning Post reported. Investment has been weaker still, with fixed-asset investment declining over the first half of the year.
Weighing heaviest is the property sector, whose long slump shows little sign of ending. Real-estate investment has fallen sharply, dragging on construction and denting the confidence of households who have long treated property as their main store of wealth.
Exports the bright spot
The one clear source of strength was trade. Chinese exports jumped in the second quarter, led by semiconductors and computer components as global demand for artificial-intelligence hardware remained strong. That surge cushioned the blow from weak domestic demand and kept overall growth from falling further.
But the external picture is far from secure. CNN noted that the escalating conflict involving Iran has unsettled global energy markets and trade, and analysts warn that higher oil prices and disrupted shipping could yet weigh on Chinese exporters and on growth in the second half.
Pressure for stimulus
The disappointing numbers have sharpened expectations that policymakers will act. Although the first-half figure keeps China within its target range, the sharp quarter-on-quarter deceleration has prompted economists to call for additional support, whether through interest-rate cuts, more government spending, or further measures to stabilize the housing market.
For now, officials have signalled they are watching conditions closely, language that in the past has often preceded new measures. The question for the world's second-largest economy is whether export strength and targeted support can offset a consumer and property slump that has proved stubbornly hard to shake.
