China's economic growth slows to weakest pace in three years despite export boom

China's economy grew at an annualized 4.3% in Q2 2026, down from 5% in Q1 and below forecasts, the weakest pace in over three years.

Exports rose 17.6% in H1 2026 and 27% in June, driven by AI and electric vehicle demand, but weak domestic demand and investment dragged growth.

Consumer spending and investment remained subdued amid a prolonged property market downturn and employment uncertainty.

China's push into high-tech manufacturing like AI, robotics, and semiconductors has created an uneven economy, with lower-value sectors that generate jobs lagging.

Officials aim for higher-quality growth by strengthening the domestic market and supporting employment, while the 2026 growth target is set at 4.5–5%.