News Brief · China / Global
China’s growth slows and affects global demand
Updated July 2026
China’s real GDP grew by 4.3% year on year in the second quarter of 2026, down from 5.0% in the first quarter. First-half growth was 4.7%, making this a useful example of how slower activity in a major economy can weaken external demand elsewhere.
What happened
China’s National Bureau of Statistics reported that real GDP increased by 4.3% year on year in the second quarter of 2026, compared with 5.0% in the first quarter. Across the first half of 2026, GDP grew by 4.7% and total retail sales of consumer goods grew by 1.3% year on year.
Why it matters
China is a major market for manufactured goods, commodities and services. Slower Chinese growth can reduce demand for other countries’ exports, lowering net trade and aggregate demand. The effect is larger for economies that depend heavily on Chinese demand and smaller where domestic demand or alternative export markets can offset the shock.
Exam relevance
Useful diagram: AD/AS diagram showing weaker external demand reducing AD
Sources and evidence note
Evidence is taken from China’s National Bureau of Statistics first-half 2026 national accounts release. The causal link to trading partners is EconToMarks analysis and should be evaluated using each economy’s trade exposure.