China’s economy lost some momentum in the second quarter of this year, with the government reporting Wednesday that growth came in at an annualized rate of 4.3%.
That figure marks a step down from the 5% expansion recorded during the January through March period. The April-June slowdown came even as Chinese exports performed strongly, fueled in part by global demand tied to artificial intelligence technology and continued international appetite for Chinese electric vehicles.
China has largely avoided the broader economic fallout from the Iran war. Customs figures show exports climbed 17.6% during the first half of the year compared to the same period a year ago.
However, spending by consumers at home and domestic investment have both been sluggish, which has limited the overall economic benefit of China’s booming export sector.
For the full year 2026, Chinese leadership has established a growth target ranging from 4.5% to 5% — a more modest goal than the 5% growth the country achieved last year.
The International Monetary Fund recently adjusted its outlook for China upward by 0.2 percentage points, now projecting 4.6% annual growth. Even so, the IMF cautioned that it expects China’s economy to slow further, expanding by just 4.1% in 2027.
