In the second quarter of 2026, China's GDP growth was reported at 4.3%, falling short of the anticipated 4.5% and down from 5% in the previous quarter. This growth rate is below Beijing's modest full-year target of 4.5% to 5%, reflecting ongoing economic pressures, including strained trade relations with the U.S. and EU, and weak domestic demand.
Urban fixed-asset investment saw a significant decline of 5.7% in the first half of the year, worse than the expected 4.9% drop, indicating a deepening investment slump exacerbated by a prolonged downturn in the property sector. Retail sales showed a slight recovery in June, growing by 1% after a previous decline, but overall consumption remains subdued.
Industrial output, however, increased by 5.3%, driven by strong global demand linked to AI investments. Despite these mixed signals, analysts like Zhiwei Zhang from Pinpoint Asset Management suggest that the government is unlikely to change its economic policies significantly in the near term, as the strong performance in exports and the first quarter's growth provide some stability.
The urban unemployment rate stood at 5% in June, with the government aiming to keep it below 5.5% over the next five years