China's economy grew 4.3 per cent in the June quarter, its statistics bureau reported on Wednesday, below the floor of Beijing's 4.5 to 5 per cent target for the year and the weakest quarter since the end of 2022.
Growth from the previous quarter slowed to 0.9 per cent, from 1.3 per cent in the March quarter, and the annual figure missed the 4.5 per cent economists had forecast in a Reuters poll. It was the first full quarter since the Middle East war began in late February. "This was the slowest growth in any quarter since the lockdown-impacted fourth quarter of 2022," said Lynn Song, chief economist for Greater China at ING.
The miss splits cleanly in two. China's export machine is running hot: shipments jumped 27 per cent in June from a year earlier, and monthly car exports topped one million for the first time. At home, retail sales grew just 1 per cent in June, fixed asset investment fell 5.7 per cent across the half, and property investment dropped 18 per cent. The statistics bureau described an "imbalance between strong supply and weak demand".
“Property investment falling 18% shows the sector remains the structural drag," said Shier Lee Lim of payments firm Convera. Kenneth Goh of UOB Kay Hian saw a longer job: "Reviving consumption is the harder job. It takes time to rebuild household confidence.”
For Australia, the property number is the one that counts. Residential construction is the steel-intensive end of China's economy, and it is still shrinking at close to a fifth a year, while the export sectors that beat forecasts, semiconductors and cars among them, use far less Australian ore.
The markets that price that exposure took the data calmly. The ASX 200 rose 0.37 per cent to 8,841.1 on Wednesday, led by BHP, up more than 3 per cent as iron ore futures advanced on June industrial production growth of 5.3 per cent, which beat forecasts. Spot ore held near US$98.88 a tonne and the Australian dollar closed at 69.87 US cents in Sydney, up from 69.28 a day earlier. The reading from the trading floor: steel mills are still producing, whatever the headline says.
Tony Sycamore of IG expects Beijing to respond with money. "This is a big miss, but it will likely see the July politburo meeting signal acceleration of fiscal rollout for quarter three," he said. The Reuters poll now has China growing 4.6 per cent across 2026 and slowing again in 2027.
Canberra had not commented on the figures by Thursday morning. The next signal is the politburo's July meeting, and the number to watch between now and then is property investment, the line that connects Chinese apartment starts to Pilbara royalties.
