China Economy Grows at 4.3%, One of Lowest Rates on Record 2026

China economy grew at just 4.3% in the second quarter of 2025, one of its lowest quarterly rates on record, missing the government's 4.5% to 5% target and signaling deepening economic challenges.

The data released by the National Bureau of Statistics of China showed the weakest expansion since the final quarter of 2022, when the country was still under strict Covid-19 restrictions. The latest figures underscore the fragility of the world's second-largest economy as it struggles to reignite domestic demand.

Exports Surge While Domestic Demand Stalls

While China's exports jumped 27% in June, domestic consumption remained tepid. Monthly car exports topped 1 million for the first time, but domestic vehicle sales plummeted more than 16%. Retail sales excluding cars rose just 3%, far below what economists say is needed for sustainable growth.

The contrasting data highlights how China's economy has become increasingly dependent on selling goods abroad. Exports now account for about 20% of gross domestic product, making the country vulnerable to global trade tensions.

Fixed-Asset Investment Declines

Fixed-asset investment, which includes spending on infrastructure, bridges, and roads managed by provincial authorities, declined by more than 4% between January and May. Leading Chinese economist Li Daokui warned that local governments have transformed from engines of growth into bottlenecks.

Key Takeaways for Investors and Consumers

• China's GDP growth is at multi-year lows, missing government targets.
• Exports are booming, but domestic demand remains weak.
• Fixed-asset investment is declining, signaling reduced local government spending.
• Analysts expect potential stimulus measures from the Chinese Communist Party later this month.
• Global markets may face volatility as China's slowdown impacts supply chains.

Economists say more extensive measures are badly needed to increase consumer spending if the economy is to rebalance away from exports. The Chinese Communist party's top officials are gathering later this month, and markets are watching for any indication of new stimulus.

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