China Q2 GDP: Growth target missed for first time since Covid as Iran turmoil roils global trade

Source Domain: www.cnn.com

China’s economy grew 4.3% in the second quarter of 2026, falling short of the expected 4.5% growth.
The lower-than-expected growth rate highlights economic challenges both domestically and internationally.
Domestic consumption remains weak despite a surge in exports, particularly in high-tech goods like semiconductors and computer parts.
The divergence between robust export growth and stagnant domestic demand illustrates a growing “two-track economy.”
Rising retail sales and high energy costs from the war in Iran contributed to minor improvements and lifted China out of deflation.
External conflicts and the possible resumption of Middle East tensions could further harm China’s economy by disrupting supply chains and increasing prices.
Despite significant trade surplus and robust exports, a recent improvement in US-China relations could promote future trade and investment.

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