China’s economic growth slows despite strong exports

China’s economic growth slowed in the second quarter as weak domestic demand and geopolitical uncertainty outweighed the country’s strong export performance, the BBC reported.

Official figures showed the world’s second-largest economy expanded by 4.3% between April and June, down from 5% in the first quarter and below Beijing’s annual growth target of 4.5% to 5%. The latest data covers the first full quarter since the start of the conflict between the U.S. and Israel on one side and Iran on the other.

China’s National Bureau of Statistics said the economy is facing growing external instability and uncertainty, while also pointing to an imbalance between strong supply and weak domestic demand.

The weaker growth comes despite a sharp increase in exports. Separate data released this week showed China’s exports rose 27% in June compared with a year earlier, driven by strong demand for semiconductors used in AI data centers and electric vehicles. Monthly car exports exceeded one million units for the first time.

Other economic indicators continued to show mixed results. New home prices declined again in June, although at a slower pace than in May, while retail sales increased by 1%, recovering from a 0.6% decline a month earlier.