China's growth slows to 4.3%, its weakest since 2022, missing Beijing's target

China's economy is losing momentum. The world's second-largest economy expanded 4.3% in the second quarter compared with a year earlier, official data showed, the weakest quarterly reading since the end of 2022 and a slowdown from 5.0% in the first quarter.

A miss on several fronts

The figure fell short of the roughly 4.5% economists had expected and dipped below the lower edge of Beijing's 4.5% to 5% annual growth target. For the first half of the year, growth came in at about 4.7%. The shortfall sharpens the pressure on policymakers, who have leaned on cautious, targeted measures rather than the large debt-fueled stimulus of past downturns.

Property and the consumer

The drag is familiar. China's real-estate sector, once an engine of growth, remains mired in a years-long slump that has weighed on construction, local-government finances and household wealth. With home values soft and job prospects uncertain, many families have held back on spending, leaving domestic demand weak. That combination, a property downturn plus cautious consumers, has proven hard to shift.

Exports carry the load

One area of strength kept the quarter from looking worse: exports. Chinese shipments abroad, boosted by demand tied to the global artificial-intelligence build-out, have grown briskly and helped offset softness at home. But that reliance is also a vulnerability. With the U.S.-Iran conflict roiling trade and energy markets and trade tensions simmering, leaning on foreign demand leaves China exposed if global conditions turn.

Why it matters globally

China's growth rate is not just a domestic story. As a hub of global supply chains and a major buyer of commodities and manufactured goods, a slower China means weaker demand for exporters worldwide, even as its own export surge adds competitive pressure on other economies. Economists increasingly expect Beijing to roll out additional support, potentially more spending on social services to coax consumers to spend, though officials have signaled reluctance to return to the property-driven stimulus of the past. For now, the second-quarter number is a reminder that the recovery in the world's second-largest economy remains uneven and fragile.