China's Economy Grows 4.7% in First Half of 2026 as Quarterly Momentum Slows

China's economy grew 4.7% year-on-year in the first half of 2026, reaching 69.57 trillion yuan (about $10.28 trillion) — but the pace of growth eased notably between the first and second quarters, pointing to softening momentum heading into the second half of the year.

A quarter-by-quarter slowdown

Q1 2026 GDP grew 1.3% quarter-on-quarter, the strongest quarterly expansion since Q4 2024, but Q2 growth slowed to 0.9% quarter-on-quarter — matching market expectations but easing from Q1's pace. On a year-on-year basis, growth slowed from 5.0% in Q1 to 4.3% in Q2, the weakest quarterly reading since Q2 2024.

What's driving the slowdown

Fixed-asset investment fell 5.7% year-on-year over the first half, a significant drag on overall growth, while retail sales grew a more modest 2.7%, suggesting softer domestic demand alongside the investment weakness. The CNBC report attributed part of the softness to oil price shocks compounding already-soft domestic demand.

Where the growth is coming from

Not every sector slowed — industrial output rose 5.4% over the first half, with equipment manufacturing up 9.3% and high-tech manufacturing up a stronger 13.3%, showing growth concentrated in higher-value manufacturing even as broader investment activity cooled. Foreign trade also grew robustly, with imports and exports combined up 16.9% year-on-year to 25.47 trillion yuan.

Why this matters globally

As the world's second-largest economy, a meaningful slowdown in China's growth trajectory has ripple effects on global trade, commodity demand, and supply chains well beyond its own borders — making Chinese quarterly GDP data one of the more closely watched economic releases worldwide, not just a domestic statistic.