China's Economy Grows at Slowest Quarterly Pace in More Than 3 Years

China's economy grew at its slowest quarterly pace since the final quarter of 2022, when authorities lifted the restrictions imposed due to the COVID-19 pandemic.

The data from the National Bureau of Statistics came in below the official growth target range of 4.5% to 5%, and was also lower than the 5% year-on-year growth rate recorded in the first quarter.

The scale of the slowdown is likely to dominate the agenda of the Politburo meeting of the ruling Communist Party later this month, and officials may choose to accelerate spending and increase investment in infrastructure projects, after spending cuts in recent months contributed to the growth slowdown following a surprise rebound at the start of the year.

However, the economy grew 4.7% in the January-June period, remaining within the target range, reducing the urgent need for a large stimulus package.

Mao Shengyong, deputy director of the National Bureau of Statistics, said in a statement: 'The slowdown in growth in the second quarter is mainly due to short-term external factors.' He added that despite the impact of 'temporary factors' on some sectors, such as coal mining, 'other sectors are operating normally, and the economic fundamentals, which are stable and improving in structure, have not changed.'

Key Chinese Data in the Second Quarter of 2026

Item

Expectations

Change rate in second quarter from previous year

Change rate in second quarter of current year

GDP change rate (year-on-year)

4.5%

4.3%

GDP change rate (quarter-on-quarter)

0.9%

The data also showed that urban fixed asset investment fell by 5.7% in the first six months of the year year-on-year, compared with an expected decline of 4.9%.

The urban unemployment rate fell to 5% in June, compared with 5.1% in May.

Additional Chinese Data for June 2026

Item

Expectations

Change rate in May

Change rate during June

Retail sales

(year-on-year)

(-0.1%)

(-0.6%)

Industrial output

(year-on-year)

4.7%

4.5%

5.3%

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