China's economy grows 4.7% in first half, but Q2 slowdown hits lowest since late 2022

China's economy grew 4.7% in the first half of this year, but second-quarter growth slowed to 4.3% — the weakest pace since the fourth quarter of 2022, when the country was still reeling from the effects of COVID-19 restrictions.

The National Bureau of Statistics said Wednesday that China's GDP for the first half reached 69.57 trillion yuan ($10,300 billion) in constant-price terms, up 4.7% from a year earlier.

The first-half growth rate sits in the middle of the annual target range of 4.5 to 5 percent that the government set in its work report to the National People's Congress in March. First-quarter GDP growth came in at 5.0%, while the second quarter slowed to 4.3%.

The second-quarter figure fell short of the 4.5% consensus forecast compiled by Reuters and Bloomberg. It was also the lowest quarterly reading since the fourth quarter of 2022, when China's economy took a severe hit from the spread of COVID-19 and growth slumped to 2.9%.

Mao Shengyong, deputy head of the National Bureau of Statistics, told reporters Wednesday that "China's economy withstood internal and external pressures in the first half of the year and operated steadily within a reasonable range." He said production and supply grew at a relatively brisk pace, the employment situation remained broadly stable and prices showed a mild upward trend, adding that foreign trade posted solid gains, new growth drivers expanded rapidly and people's livelihoods were effectively supported.

Chinese authorities cautioned, however, that external uncertainties remain significant and that domestic challenges — including overcapacity and insufficient demand — are still pronounced, saying the foundation for economic recovery needs to be further consolidated.

Market observers noted that while China's first-half growth landed within the government's 4.5–5% target range, concerns remain about the quality and sustainability of that expansion.

Reuters attributed the second-quarter slowdown to weak domestic demand, a prolonged real estate slump and subdued investment, noting a persistent imbalance in which manufacturing and exports are sustaining growth while consumption and private investment lag behind.

Gary Ng, senior economist for Asia-Pacific at Natixis in Hong Kong, said consumers are reluctant to spend beyond basic goods and investment is declining amid an uncertain property market recovery. "AI-related sectors are an exceptional area showing strong demand and growth," he added. He said China's economy is showing a wide divergence between the expansion of high-tech industries and the weakness of domestic demand sectors.

The National Bureau of Statistics outlined its policy priorities for the second half, including expanding domestic demand, improving supply-side structures and nurturing new growth drivers. It said authorities would also work to stabilize employment, business confidence, market conditions and expectations, while accelerating the development of a strong domestic market to pursue both qualitative and quantitative economic growth.