China's economy grows just 4.3% as youth unemployment fears return

China's economy grew by just 4.3% in the three months to June, one of its weakest quarterly readings on record and below the government's own target range of 4.5% to 5% for the year.

The figure lands well short of the pace the world's second-largest economy sustained for much of the past two decades, and it underscores how sharply China's growth model has cooled.

Consumer demand remains a soft spot. Retail sales excluding cars rose about 3% last month, but economists said more sustained consumption growth would be needed to put the recovery on a firmer footing. Persuading households to spend rather than save has become one of Beijing's central economic challenges.

The labour market is another pressure point. Youth unemployment could be heading back toward levels last seen more than three years ago, according to reports, as a record number of graduates prepare to enter the workforce. Absorbing so many young jobseekers into a slowing economy is a delicate task for policymakers.

For 2026 as a whole, Chinese leaders set a growth target of 4.5% to 5%, slower than the roughly 5% recorded the previous year — an implicit acknowledgment that the era of breakneck expansion has passed.

China's slowdown matters far beyond its borders. As a major buyer of commodities and a manufacturing hub at the centre of global supply chains, shifts in Chinese demand ripple through economies from Africa to Latin America, affecting the prices of everything from oil to metals.

For many developing economies, including several in Africa that count China as a leading trade partner and lender, weaker Chinese growth can mean softer demand for exports and a more cautious approach to overseas investment.

Investors are now watching whether Beijing rolls out fresh stimulus to shore up confidence, and whether measures aimed at boosting consumption can gain traction where previous efforts have struggled.

The quarter's numbers do not signal crisis, but they do confirm a durable shift: China is settling into a slower, more uncertain phase of growth, with consequences that reach well beyond its own economy.