China’s economy grew at a slower pace in the second quarter of the year as exports stayed strong but domestic demand weakened.
China's National Bureau of Statistics (NBS) said official data showed gross domestic product (GDP) grew by 4.3% in the April-June quarter, down from 5% growth in the first quarter. The figure was also below Beijing’s annual growth target range of 4.5%-5%.
The latest figures are the first full quarter since the outbreak of the Iran conflict in late February, when higher oil prices added to the squeeze on world economic conditions. It also marks China’s slowest quarterly growth since the country eased its COVID-19 restrictions at the end of 2022.
External uncertainties had grown while domestic demand stayed relatively weak, the National Bureau of Statistics said in a statement accompanying the data. The agency also said a gap between production and consumer demand remained a problem for the economy.
The GDP report comes a day after customs data showed China's exports grew 27% from a year earlier in June. Strong global demand for semiconductors that power artificial intelligence infrastructure and ongoing overseas sales of Chinese-made electric vehicles bolstered export growth. Customs data show that monthly vehicle exports have exceeded one million units for the first time.
Other economic indicators released with the GDP numbers showed a mixed picture. The Chinese property market remained under pressure, with new home prices down 0.1% in June, although the pace of the decline eased from the previous month.
Consumer spending improved modestly. Household consumption appears to be stabilising, though it remains relatively subdued, with retail sales rising 1% in June after a 0.6% drop in May.
In March, China cut its annual growth target to a range of between 4.5% and 5%, the lowest official growth target since 1991. Some economists saw the move as giving policymakers more flexibility as they respond to domestic economic challenges and external risks.
