China's Economic Growth Slows to 4.3%, Weakest Since 2022

China's economy grew at an annual pace of 4.3% in the second quarter of 2026, the weakest reading since late 2022. The figure came in below market forecasts and reinforced concerns that the world's second-largest economy is losing momentum as the year progresses.

Officials and analysts pointed to weak domestic demand and structural economic imbalances as the main drags on growth, with the prolonged real estate downturn continuing to weigh on developer balance sheets, household wealth, and consumer confidence. Investment and retail activity have reportedly struggled to keep pace even as external trade held up better, a divergence that underscores how much of China's recent growth has leaned on exports rather than domestic consumption.

Despite the sharper second-quarter slowdown, first-half GDP growth held at 4.7%, keeping China closer to the government's annual growth target for now. The gap between the steadier first-half average and the weaker second-quarter print suggests momentum could keep fading through the year unless policymakers respond with additional support.

For global markets, a cooling China carries outsized weight given its role as a major demand center for commodities, industrial goods, and multinational corporate revenue. Slower Chinese growth could pressure commodity prices and weigh on companies with significant China exposure, and investors may want to watch for signs of additional fiscal or monetary stimulus out of Beijing as a signal of how policymakers plan to address the imbalances weighing on growth.