China's Economic Growth Slows Sharply in Second Quarter, Missing Target
Weak domestic demand and global factors impacted China's GDP, despite a surge in exports.
China's economic growth faltered in the second quarter, with gross domestic product (GDP) rising by 4.3% between April and June, falling short of Beijing's annual target. This slowdown occurred despite a significant increase in the country's exports during the same period.
Official figures released on Wednesday revealed that China's exports jumped by 27% in June compared to the previous year. This surge was partly driven by strong global demand for semiconductors used in AI data centers and a record-breaking rise in electric vehicle (EV) exports, with monthly car exports exceeding one million for the first time.
However, the overall economic performance was overshadowed by weak domestic demand and the impact of global events, including the Iran war on oil prices. These factors contributed to the GDP growth missing the target set by the government.
In March, China adjusted its annual economic growth target to a range of 4.5% to 5%, its lowest projection since 1991. Analysts suggested this move provides officials with greater flexibility in managing the economy.
The latest GDP figures mark the first full quarter of economic data released since the Iran war began on February 28. The second-quarter growth follows a 5% expansion in the first quarter.
Separate data highlighted ongoing domestic economic challenges. New home prices continued to contract in June, although the rate of decline slightly eased from the previous month. Retail sales showed improvement, rising by 1% in June after a 0.6% decrease in May, indicating some recovery in consumer spending.