According to Standard Chartered economists Hunter Chan and Shuang Ding, China’s Gross Domestic Product (GDP) growth slowed to 4.3% year-on-year in the second quarter, falling below the government’s targeted range of 4.5–5.0% and marking a sharp deceleration from the 5% growth recorded in the first quarter [1]. The economists attribute this slowdown to persistently soft domestic demand, despite stronger performance in exports and industrial production [1].
The report highlights that the imbalance between robust supply and weak domestic demand is expected to remain a significant challenge in the second half of the year [1]. In response, the government is anticipated to accelerate fiscal spending on infrastructure projects and maintain an accommodative monetary policy stance, leveraging what is described as 'still-decent fiscal room' in the latter half of the year [1].
Standard Chartered maintains its 2026 growth forecast for China at 4.6%, based on the assumption of faster budget implementation in the second half of the year [1]. The economists also note that the government is likely to prioritize the execution of existing policies while preparing contingency plans, and may consider additional stimulus only after ramping up fiscal spending on infrastructure [1].
No specific market reactions or analyst opinions beyond those of Standard Chartered were mentioned in the article [1].
CONCLUSION
China’s Q2 GDP growth has slowed below target, with domestic demand remaining weak despite stronger exports and industrial output. Standard Chartered expects policy support to continue, with accelerated fiscal spending and an accommodative monetary stance aimed at stabilizing growth. The outlook for 2026 remains steady at 4.6% if policy implementation is expedited.