Official data released on Wednesday revealed the world's second-largest economy grew 4.3 per cent in the last quarter from a year earlier, slowing from five per cent in the January-March period.
Analysts polled by Reuters had forecast the April-June quarter gross domestic product would expand 4.5 per cent from a year earlier, cooling from a five per cent gain in the first quarter.
The second-quarter year-on-year growth marked the slowest pace since the fourth quarter of 2022 when China was grappling with the COVID-19 pandemic.
China's economy is losing momentum after a stronger-than-expected start to the year, fuelling concerns that weak demand at home is leaving growth increasingly vulnerable to any downturn abroad.
Recent data has pointed to a deepening imbalance in China's economy, with firm industrial output and export activity standing in stark contrast to weak consumer spending and private investment as a prolonged property downturn drags on confidence.
China has largely shrugged off wider economic impacts from the Iran war. Exports rose 17.6 per cent in the first half of the year from a year earlier, according to customs data.
But domestic spending and investment have lagged, limiting the boost from China's export manufacturing.
For the whole of 2026, Chinese leaders have set a growth target of 4.5 per cent to five per cent, slower than last year's five per cent.
The International Monetary Fund recently raised its forecast for China's annual growth by 0.2 percentage point to 4.6 per cent but said it expects China's economy to expand just 4.1 per cent in 2027.
Economists warn Beijing's reliance on manufacturing and exports to compensate for weak household demand is becoming harder to sustain as global growth cools and external demand loses momentum beyond semiconductors.
China has largely absorbed the latest oil shock thanks to large stockpiles, a broader energy base and state-controlled fuel prices, but a prolonged rise in energy costs could test that resilience.
Persistently expensive oil could lift costs for factories, squeeze profit margins and reduce Beijing's room to support growth if inflation rises without a stronger recovery in consumer demand.
The uneven data underscores the challenge for policymakers to keep growth on track while correcting a deep supply-demand mismatch, with strong production increasingly out of step with weak spending at home.
China's economic growth is expected to slow to 4.6 per cent in 2026 from 5.0 per cent last year, before easing further to 4.4 per cent in 2027, according to a Reuters poll.
with AP
