HONG KONG (AP) 鈥� China鈥檚 economy slowed sharply to a 4.3% annualized pace of growth in the April-June quarter, the government said Wednesday.
It was the slowest growth since late 2022 and far weaker than its start for the year, despite a surge in exports thanks partly to the boom in artificial intelligence, and robust global demand for Chinese electric vehicles.
China has largely shrugged off wider economic impacts from the Iran war. Exports rose 17.6% in the first half of the year from a year earlier, and 27% in June, according to customs data.
But domestic spending and investment have lagged, limiting the boost from China鈥檚 export manufacturing.
For the whole of 2026, Chinese leaders have set a , slower than last year鈥檚 5%.
The International Monetary Fund recently raised its forecast for China鈥檚 annual growth by 0.2 percentage point to 4.6%. But it said it expects China鈥檚 economy to expand just 4.1% in 2027.
Some economists say China鈥檚 economy is becoming increasingly unbalanced as heavy state support and private investments pour into frontier like AI, computer and while other areas such as lower-value manufacturing and jobs creating services industries languish.
As is true in many countries, the expansion of AI and robotics has raised worries over whether businesses will create enough jobs to sustain growth in the longer term.
鈥淐hina鈥檚 growth model has become increasingly imbalanced,鈥� said Eswar Prasad, a professor of economics and trade policy at Cornell University.
Chinese families have cut back on spending, constrained by a and uncertainties over jobs and wages.
At the same time, China鈥檚 exports of such as electric vehicles, computer chips and other electronic equipment have risen sharply, helped by hefty government support since China鈥檚 leaders have made development of advanced technologies a top priority.
China鈥檚 economy is going through a 鈥渟ignificant transition,鈥� said Wei Li, Head of Multi-Asset Investments at BNP Paribas Securities (China).
Copyright © 2026 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed.
