China's GDP slows, pressure mounts for stimulus

China's GDP grew 4.3%-4.5% in Q2 2026, the slowest since 2022 and below target. Weak demand and real estate woes are fueling calls for new stimulus, affecting crypto markets too.

China's economy expanded by 4.3% to 4.5% in the second quarter of 2026, marking its slowest growth since 2022. This rate falls at the lower end, or even below, Beijing's annual target of 4.5% to 5%, and did not meet analysts' expectations. The slowdown highlights ongoing challenges for the world's second-largest economy. The primary factors behind this deceleration are weakened domestic demand and a prolonged crisis in the real estate sector. Trade tensions with major partners like the United States and the European Union have further strained growth. Urban fixed asset investment dropped 5.7% in the first half of the year, with the real estate sector plunging by 18%. Despite these headwinds, some June indicators showed modest recovery: retail sales rose by 1%, and industrial production increased by 5.3%. The disappointing results are prompting the Chinese government to consider new monetary and fiscal stimulus measures to support growth and stabilize markets, including the cryptocurrency sector, which is also feeling the impact of the slowdown.