China's economy expanded by 4.3 percent in the second quarter of 2026 compared to the same period last year, marking one of the slowest rates of growth outside the pandemic lockdowns, according to data released Tuesday by the National Bureau of Statistics. This performance is the weakest since China began formally reporting GDP figures in the 1990s amid economic reforms, raising concerns about the country’s ability to meet its official growth target.

The government had set a growth goal of between 4.5 and 5 percent for 2026, the lowest benchmark Beijing has established in 35 years. The subdued expansion reflects continued caution among consumers and businesses, which have been hesitant to increase spending and investment despite the country's gradual recovery from the Covid-19 disruptions.

Domestically, household and corporate confidence remain weak, prompting Chinese Premier Li Qiang to indicate that the government is exploring additional fiscal measures to boost demand. "The authorities are studying additional policies," Li said, signaling a possible increase in government spending as a tool to support the economy.

While domestic consumption remains soft, China’s export sector continues to contribute significantly to economic growth. However, reliance on export-driven growth alone may not be sufficient to sustain momentum amid ongoing uncertainties in global markets.

Economists have noted a potential shift in how Beijing reports economic data. Julian Evans-Pritchard of Capital Economics suggested that the recent GDP figures might reflect a more cautious approach by Chinese authorities, possibly rolling back previous optimistic reporting. “The authorities appear willing to curb over-reporting and allow published growth to come in near the bottom of their target range,” he said. Based on these developments, Capital Economics lowered its forecast for official GDP growth to 4.6 percent for the year.

The latest data underscore the challenges China faces as it balances efforts to reignite domestic demand while maintaining its standing as a key player in global trade. How the government responds to these pressures in the coming months will be closely watched by markets and policymakers worldwide.