China recorded its weakest quarterly expansion since late 2022 during the April to June period. The slowdown stemmed from subdued domestic consumption, a continuing property downturn and reduced investment, even as exports held up due to demand for artificial intelligence components.
Government figures issued on Wednesday indicated that gross domestic product rose 4.3 percent from a year earlier in the second quarter. This marked a decline from the 5 percent pace seen in the first quarter and came in below analyst forecasts. The result also fell short of Beijing’s annual growth goal of 4.5 to 5 percent.
China ranks as India’s second-largest trading partner and the largest buyer of several key industrial raw materials. A softer Chinese economy typically lowers demand for commodities including steel, copper and crude oil, which can influence global prices. For India this may ease inflation and cut import expenses for manufacturers. Yet reduced Chinese purchases can also limit worldwide trade and pressure export-dependent economies in Asia.
The data revealed widening imbalances in China. Exports stayed firm thanks to overseas orders for AI chips, electronics and vehicles, but household spending stayed weak and the property market remained under pressure. Retail sales in June posted only slight gains, while fixed-asset investment shrank in the first half and property investment dropped sharply, pointing to fragile consumer sentiment and private-sector spending.
Effects on India appear mixed. Lower commodity prices worldwide could help limit imported inflation and reduce costs for auto, infrastructure and manufacturing industries. At the same time, softer Chinese demand may curb global growth and reduce overseas orders for Indian firms. Companies seeking to shift supply chains away from China may gradually increase production in India, though such moves usually occur slowly.
The below-expectation reading has increased forecasts that Chinese authorities will introduce further targeted measures in coming months. Economists surveyed by Reuters before the release predicted moderate growth this year and next, along with additional policy support, though analysts expect focused fiscal steps rather than broad stimulus.
