Rebalancing Growth: China Economic Update

BEIJING, July 7, 2026 - China's economy stayed resilient in early 2026, supported by strong high-tech investment and exports, according to the World Bank's latest China Economic Update, Rebalancing Growth.

The report shows that policy support, high-tech investment, and buffers against global energy supply disruptions partly offset weaker domestic demand in the second quarter. However, as the property sector continues to adjust to lower housing demand and consumers remain cautious, growth is projected to slow to 4.4% in 2026. Growth is expected to ease further to 4.3% in 2027, as progress in rebalancing the economy toward consumption remains gradual.

"Further strengthening the social safety net would be a key measure to boost consumption. Raising benefit levels, extending coverage to informal workers, and providing access based on residence could give households the confidence to spend more rather than save," said Tatiana Rosito, World Bank Division Director for China, Mongolia and Korea.

Risks to the outlook are broadly balanced. Although uncertainty with respect to global energy supply has declined in recent weeks and oil prices have fallen, risks of renewed volatility remain. If the property downturn deepens further, this could compound pressures on consumer spending and investment in real estate and related sectors. On the upside, growth could exceed current projections if fiscal stimulus and AI-related investments prove stronger than expected.

This latest Economic Update also examines how China's low-carbon transition is reshaping jobs and the labor market. It finds that demand for both green technical skills and transferable competencies, such as systems thinking, adaptive learning, and digital skills, is expanding beyond narrowly defined low-carbon sectors. These skills command sizeable wage premiums. Yet, skill gaps are constraining inclusive employment gains.

"The low-carbon transition is creating new job opportunities, but workers need support to move into new roles. Training, portable green skill credentials, and stronger social protection can help make the transition smoother and more inclusive," said Elitza Mileva, World Bank Lead Economist for China.