China's GDP grew at an annualised rate of 4.6% in the first quarter of 2026, slowing from 5.2% in the previous quarter and falling short of the government's official annual target of 5%. The deceleration was driven by the impact of US tariffs on Chinese exports, which fell 8.4% year-on-year in March, along with persistent weakness in the property sector and sluggish consumer confidence.
The Chinese government has responded with a series of stimulus measures, including a 50 basis point cut in the reserve requirement ratio, a 600 billion yuan infrastructure bond issuance and expanded trade-in subsidies for consumer electronics and automobiles. However, economists say the stimulus has so far been insufficient to fully offset the drag from the trade war and the ongoing property market correction.
The slowdown in China has significant implications for global commodity markets, with prices of iron ore, copper and aluminium under pressure from reduced Chinese demand. For India, China's difficulties present both a challenge — through potential dumping of cheap goods — and an opportunity to attract manufacturing investment from companies seeking to diversify away from Chinese supply chains as global geopolitics reshape trade flows.
