BAKU, Azerbaijan, June 22. China's economy
expanded by 5% in the first quarter of 2026, supported by resilient
manufacturing activity and strong export performance, according to
OPEC.


This was stated in OPEC's June Monthly Oil Market Report.


"China’s healthy 1Q26 economic growth, reaching 5%, stood at the
upper end of the authorities’ annual growth objective of 4.5% to
5%," the report says.


According to OPEC, manufacturing activity and robust exports
helped offset continued weakness in the property sector and only
moderate growth in household consumption during the first three
months of the year.


The report notes that input-cost pressures remained elevated
amid disruptions in global energy and raw material markets.


However, China's diversified energy mix, administrative pricing
mechanisms and policy measures have so far limited the impact on
inflation and domestic demand, report says.


At the same time, OPEC cautioned that higher energy and raw
material costs could put pressure on corporate profitability,
particularly in sectors facing weak domestic demand and strong
competition.


The report also highlights ongoing challenges in the real estate
sector, which continues to weigh on domestic demand.


"Real estate investment fell by 13.7%, year-on-year, in the
first four months, while commercial housing sales by value and
floor space continued to contract," the report says.







According to OPEC, although the housing market adjustment has
not triggered broader financial instability, it continues to affect
private investment, consumer confidence and local
government-related activity.


The organization noted that Chinese authorities remain focused
on stabilizing the property sector and limiting spillover risks
rather than pursuing a broad property-driven expansion.


OPEC data also suggest that higher energy and raw material costs
have so far been largely absorbed by the Chinese economy without
significant impact on inflation or final demand, supported by
policy measures and a diversified energy structure.


From this perspective, it may be noted that the overall
macroeconomic environment remains relatively stable despite
external price pressures, while policy focus continues to be
directed toward maintaining balance in key sectors of the
economy.


The report further indicates that growth priorities remain
concentrated around manufacturing, technology and other
policy-supported areas, alongside ongoing efforts to stabilize the
real estate sector.


China’s manufacturing sector remains one of the key pillars of
the national economy, accounting for roughly a quarter of GDP and a
significant share of global industrial output, according to
industry data. The sector spans a broad range of industries,
including electronics, machinery, automotive, chemicals and
high-tech equipment, supported by extensive industrial clusters and
integrated supply chains across major coastal regions.


The combination of large-scale production capacity, deep
supplier networks and ongoing industrial upgrading has allowed the
sector to maintain steady value-added growth, even as the economy
gradually shifts toward more technology-intensive production. In
this context, manufacturing continues to play a central role in
supporting overall GDP expansion, acting as a stable base for both
export performance and domestic industrial activity.