China's economy is expected to grow at a slower pace in the second quarter of 2026, raising questions about whether the government will increase spending to ensure that annual growth targets are met.
Economists expect China's gross domestic product (GDP) to expand by 4.5% year-on-year.
This is lower than the 5% growth recorded in the first quarter and below the government's official target of between 4.5% and 5%.
The slowdown is due to several factors, including still weak consumer spending, a continued decline in the property market and declining investment in traditional sectors.
Quarter-on-quarter, China's economy is expected to grow by just 0.9%, the slowest rate since 2023.
However, some sectors are still showing strong performance. China's exports remain resilient despite global trade tensions and conflicts in the Middle East.
In addition, increasing global investment in artificial intelligence (AI) technology is also benefiting Chinese manufacturers, especially in the electronics and high-tech sectors.
Other data also shows the challenges that the country's economy still faces. Asset investment is expected to continue to decline, while investment in the real estate sector is expected to decline further.
Retail sales are expected to show only a small increase after experiencing a decline in the previous month.
This situation reflects consumer sentiment that is still cautious in spending.
For the second half of this year, many analysts expect the Chinese government to accelerate the implementation of infrastructure projects and use more fiscal funds to support economic growth.
However, the success of these measures depends on the government's ability to stimulate domestic demand and stabilize the still weak real estate market.
For now, the technology and AI sectors are seen as continuing to be the main drivers of China's economic growth.
