China’s Economic Growth Slows To Three-Year Low At 4.3% In June Quarter

China’s economic growth slowed more than expected in the latest quarter, recording its weakest performance in more than three years and increasing pressure on policymakers to take fresh measures to support the economy.

Gross domestic product (GDP) grew 4.3 per cent year-on-year in the second quarter, according to data released by the National Bureau of Statistics (NBS) on Wednesday.

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The figure was below economists’ expectations of 4.5 per cent and also fell short of the government’s annual growth target range of 4.5-5 per cent. In comparison, the economy expanded 5 per cent in the first quarter.

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The NBS said the economy continued to operate within a reasonable range but highlighted growing external uncertainties and domestic supply-demand imbalances.

The slowdown is expected to become a key focus area when the Communist Party’s top decision-making Politburo meets later this month.

Analysts expect authorities to consider stronger fiscal support, including increased public spending and infrastructure investment, after reduced government expenditure in recent months weighed on growth momentum.

Despite the weaker GDP data, financial markets showed limited reaction. The offshore yuan remained slightly stronger, while China’s 10-year government bond yield stayed steady.

Other economic indicators reflected mixed signals. Fixed-asset investment declined 5.7 per cent in the first half of the year, worsening from a 4.1 per cent fall recorded during the first five months. The decline raised concerns over weakening investment activity and business confidence.

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However, some sectors showed resilience. Retail sales unexpectedly increased 1 per cent after declining 0.6 per cent in May, while industrial production exceeded expectations with a 5.3 per cent rise.

The surveyed urban unemployment rate also improved slightly to 5 per cent from 5.1 per cent in May.

China’s exports and manufacturing sector have remained relatively strong, supported by global demand for artificial intelligence-related infrastructure and electronics.

However, rising trade tensions and dependence on overseas markets pose risks to future growth.

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