China: Q2 GDP growth posted the lowest post-Covid reading

Research evidence excerpt

China: Q2 GDP growth posted the lowest post-Covid reading

Global Markets Research

15 July 2026Asia Insights

Economics - Asia ex-Japan

Research AnalystsChina: Q2 GDP growth posted the lowest post-

Asia EconomicsCovid reading

Ting Lu - NIHK

Q2 GDP growth slowed to 4.3% y-o-y from 5.0% in Q1. The print is below the market ting.lu@nomura.com

consensus forecast of 4.5% and above our more cautious forecast of 4.1%. June activity +852 2252 1306

data continued to show a large divergence between strongexports (27% y-o-y) and weak Jing Wang - NIHK

domestic demand, with retail sales at 1.0% (up from -0.6% in May) and fixed asset jing.wang@nomura.com

investment (FAI) growth at -10.0% (little changed from -10.7% in May). Industrial +852 2252 1011

production growth rose to 5.3% y-o-y in June from 4.5% in May and beat market Harrington Zhang - NIHK

consensus of 4.6%. harrington.zhang@nomura.com

Beijing is likely to step up supportive measures +852 2252 2057

As this is the slowest GDP growth print since the pandemic, it has clearly elicited concern Hannah Liu - NIHK

among top policymakers. On 13 July, Premier Li Qiang called for “steppingup hannah.liu@nomura.com

countercyclicalpolicyadjustment” to stabilize growth, pointing to a more accommodative +852 2252 1082

policy stance in H2, albeit perhaps somewhat moderate in scale. The Politburo is set to

meet later this month for economic policymaking in H2. We expect the mid-year politburo

meeting to initiate a new round of supportive measures. However, the scale of such

measures might be limited for three reasons. First, conventional monetary policy

measures, such as rate cuts and RRR cuts, are either of limited space or of limited impact.

Second, Beijing recognizes that some short-term policies, such as the trade-in programs,