China's Q2 Growth Seen Slowing to 4.5% as Exports Mask Weak Demand

3 articles · Updated · Daily Sabah · Jul 12

A 4.5% year-over-year expansion is expected for China in the second quarter, down from 5.0% in Q1 but still within reach of Beijing's 4.5%-5.0% full-year target.
Weak consumer spending and a prolonged property slump drove the slowdown, with May retail sales falling for the first time in three years and fixed-asset investment also weakening.
Exports helped cushion the hit: May overseas shipments rose 19.4% from a year earlier, led by AI-related technology, renewable-energy products and automobiles despite tariffs and Middle East disruption.
The reliance on trade leaves growth exposed to weaker global demand, a U.S. trade truce due to expire in November, and possible new EU measures against Chinese imports.
Analysts say Beijing may need fresh support in the second half, shifting from debt resolution toward investment, services and employment unless household consumption and private-sector confidence recover.

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China's Q2 2026 Economic Slowdown: GDP Forecasts, Domestic Weakness, and the Path Forward

Overview

China's economy in Q2 2026 is under close watch as market participants anticipate a notable slowdown in GDP growth. While Goldman Sachs projects a full-year growth rate of 4.8%, slightly above the broader market consensus of 4.5% to 4.6%, uncertainty remains high. This divergence in outlook highlights investor caution and reflects ongoing debates about the health of China's economy and the likelihood of further policy interventions. The situation is further complicated by recent downgrades in quarterly forecasts, making the upcoming GDP data a key factor in shaping expectations for future government action and market sentiment.

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