China's economic growth slows sharply, missing target
China's GDP grew only 4.3% in the second quarter, falling short of the government's annual target, impacted by weak domestic demand and the Iran war's effect on oil prices.
China's economic growth slowed markedly in the second quarter (April to June), with official GDP figures showing an expansion of just 4.3%, below Beijing's annual target and down from 5% in the first quarter. The data, released on Wednesday, highlight the challenges facing the world's second-largest economy, including weak domestic demand and the impact of the Iran war on oil prices, which have overshadowed strong export performance.
Exports surged 27% in June compared to a year earlier, driven by global demand for semiconductors for AI data centers and booming electric vehicle sales. Monthly car exports topped one million for the first time. However, domestic indicators remain mixed. New home prices fell 0.1% in June, a slightly slower decline than the previous month, while retail sales rose 1% in June after a 0.6% drop in May.
Analysts note that Chinese businesses are absorbing higher energy and raw material costs because consumer demand is too weak to pass them on. The situation may worsen if the Iran war continues. The National Bureau of Statistics cited "external instability and uncertainty" and an imbalance between strong supply and weak demand. March's lowered growth target of 4.5%-5% was the lowest since 1991, giving officials more flexibility.
