New Delhi, Aug 22 (IANS) China’s economy slowed in the second quarter of 2026, pointing to the challenge Beijing faces in shifting from investment‑led expansion to growth driven by domestic consumption, a new report has said.
Gross domestic product of China grew 4.3 per cent in the April‑June quarter on a YoY basis, down from 5 per cent in the first quarter and below the 4.5 per cent forecast by economists, the report from Kenya-based publication Capital FM Africa said.
The reading marked the weakest quarterly growth in over three years and fell short of the lower bound of Beijing’s 4.5–5 per cent annual target, it added.
The property sector remained a major drag as years of heavy construction and investment have left the sector mired in a prolonged downturn that has weakened investment, household wealth and consumer confidence.
Fixed‑asset investment fell 5.7 per cent in H1 2026, while real‑estate investment plunged 18 per cent and weakness has continued into the third quarter. July industrial output rose 4.5 per cent, down from 5.3 per cent in June, while retail sales grew only 0.6 per cent.
An export engine running on full capacity cannot indefinitely compensate for weak consumption at home, the report argued, adding that domestic demand has become such a crucial issue.
“Premier Li Qiang has acknowledged that insufficient domestic demand remains a prominent problem and has called for measures to strengthen both domestic and external demand,” the report said.
China’s trade in goods rose 16.9 per cent year‑on‑year in the first half of the year, with exports up 13.4 per cent but analysts warned that a reliance on external markets to absorb excess manufacturing capacity is unsustainable.
Excess reliance on exports is already generating tensions with trading partners concerned about Chinese subsidies, excess capacity and the impact of low-priced Chinese products on their industries, the report noted.
—IANS
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