China’s economy expanded at its slowest pace since late 2022, with gross domestic product rising 4.3% in the April‑June quarter, below economists’ 4.5% forecast and falling from 5% in the first quarter. The growth shortfall sits within Beijing’s 4.5%‑to‑5% full‑year target range and underscores weak domestic demand.

Urban fixed‑asset investment fell 5.7% in the first half, sharper than the 4.9% drop expected, as local governments prioritise debt restructuring and the pipeline of projects shrinks. Tianchen Xu expects a policy rate cut and a boost in infrastructure spending to stabilise growth, while a 12 trillion yuan borrowing plan is under discussion.

Retail sales grew 1% in June, rebounding from a 0.6% decline in May, and industrial output climbed 5.3% year‑on‑year, surpassing the 4.7% forecast. Despite a property downturn and volatile energy prices, exports remain the bright spot, powered by AI‑related demand.

The widening surplus with the EU and a 5% urban unemployment rate keep trade tensions high. Li Daokui calls for a substantial expansion in government borrowing, while analysts differ on whether the slowdown will trigger meaningful stimulus in the coming months.