China H1 2026 GDP Grows 4.7%, New Drivers Contribute Over 40%, Construction Down 4%
China's economy expanded 4.7% in the first half of 2026, within the government's 4.5%-5% target range, as first-quarter growth hit 5% and second-quarter growth slowed to 4.3%. New growth drivers spanning high-end manufacturing, the digital economy and modern services contributed over 40% of growth, while construction fell 4% and real estate slipped 0.2%. Net exports' contribution rose from 15.3% in the first quarter to 20.8% in the second, as goods exports grew 20.2% in the second quarter.
In the first half of 2026, China's economy grew 4.7%, with GDP expanding 5% in the first quarter and 4.3% in the second quarter. The half-year growth rate stayed within the government's target range of 4.5% to 5%. From the second quarter of 2025 to the second quarter of 2026, quarter-on-quarter annualized growth rates were 4.9%, 4.5%, 4.5%, 5.3% and 3.6%, respectively. The slowdown in the second quarter was linked to new developments in the global economy, with growth rates generally easing across major economies.
China's GDP follows a seasonal pattern, with the fourth quarter typically the largest, followed by the third, second and first quarters.
During the first half of 2026, new growth drivers represented by high-end manufacturing, the digital economy and modern services contributed more than 40% of economic growth. Specifically, value added in the leasing and business services sector grew 11.9%, while information transmission, software and information technology services rose 10.7%. The construction sector contracted 4% and real estate fell 0.2%.
In the second quarter of 2026, information transmission, software and information technology services and leasing and business services contributed 5.93% and 5.03% to economic growth, respectively, while real estate and construction contributed 6.34% and 5.47%. Emerging industries require less capital per worker and generate relatively lower revenue per employee, making them more sustainable. Data from the Fifth National Economic Census show that per-capita capital in information transmission and related industries is lower than in real estate, and per-capita operating revenue is also lower.
Regional growth remains dependent on investment. The ratio of per-capita GDP to the increase in aggregate social financing and labour force across provinces in 2025 shows that growth in most provinces remains closely tied to investment. At the local level, many provinces lack distinctive industrial advantages and rely more on infrastructure, real estate and public administration, a model that helps maintain a smooth economic transition.
In the first half of 2026, goods exports grew 11.9% in the first quarter and 20.2% in the second quarter, while imports rose 19.6% and 29.5%, respectively. The contribution of net exports of goods and services to growth rose from 15.3% in the first quarter to 20.8% in the second quarter. Consumption's contribution changed little, while the contribution from investment demand declined, mainly because emerging industries have lower capital requirements than sectors such as real estate.
Macroeconomic policy will monitor international conditions and balance the development of new quality productive forces with adjustment of traditional industries to ensure sustained growth.