China's GDP Growth Pressured by Oil Prices, Housing SlumpーNHK WORLD-JAPAN NEWS

Why It Matters

Slower Chinese growth tightens global demand, affecting commodity markets and multinational earnings while policy uncertainty around the US‑China summit adds risk for investors.

Key Takeaways

• China's Q1 2026 GDP projected at 4.7‑4.8% growth.
• Export surge of over 20% fuels moderate economic rebound.
• Revived consumer subsidies boost spending, but may be waning.
• Rising oil prices and housing slump pressure growth further.
• US‑China summit outcomes could influence policy and market stability.

Summary

The week’s Biz Pigs segment focused on China’s first‑quarter 2026 GDP outlook, highlighting how soaring oil prices and a prolonged housing downturn are weighing on the world’s second‑largest economy.

Analyst Naoto Saito of Daiwa Institute projects Q1 growth at 4.7‑4.8%, up from a 4.5% year‑on‑year rise in Q4 2025. The modest rebound is driven by a 20% jump in exports and a brief revival of consumer‑goods subsidies, which lifted spending after a summer lull.

Saito warns that the housing slump is now in its fifth year and that subsidies have merely pulled forward demand. With China importing roughly 70% of its oil, the recent surge in crude prices—spurred by the Iran conflict—adds cost pressure, while gasoline hikes are largely absorbed by state‑run firms.

If the trend continues, China’s annual growth could slip to around 4.4%, prompting tighter fiscal measures and heightened scrutiny of the upcoming US‑China summit, whose outcomes may shape trade policy and market confidence.

Original Description

An analyst says China's GDP in the first quarter of 2026 may improve from the previous three months. But the economy may face headwinds later in the year due to rising energy costs and a sluggish property market.

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