China GDP grows 6.9 percent in the second quarter

Growth in China’s economy this year has beaten expectations as exports recover and property construction remains strong. (Reuters)

BEIJING: The Chinese economy grew faster than expected in the second quarter, boosted by stronger industrial output and personal consumption as well as steady investments.
The country’s GDP grew 6.9 percent in the second quarter from a year earlier, the National Bureau of Statistics said on Monday, which was also the same rate as the previous quarter. Analysts have expected the Chinese economy to expand 6.8 percent in the second quarter.
Growth in China’s economy this year has beaten expectations as exports recover and property construction remains strong, though many analysts expect the world’s second-largest economy to lose steam later in the year as policy measures to rein in red-hot housing prices and a rapid build-up in debt take a greater toll on growth.
“Overall, the economy continued to show steady progress in the first half...but international instability and uncertainties are still relatively large, and the domestic long-term buildup of structural imbalances remains,” the statistics bureau said in a statement.
The government is aiming for growth of around 6.5 percent in 2017, slightly lower than last year’s actual 6.7 percent, which was the weakest pace in 26 years.
China’s factory output grew 7.6 percent in June from a year earlier, the fastest pace in three months, while fixed-asset investment expanded 8.6 percent in the first six months of the year, both beating forecasts.
Retail sales meanwhile rose 11.0 percent in June from a year earlier, the fastest pace since December 2015 and beating analysts’ expectations for a 10.6 percent rise.
An acceleration in global demand for Chinese products could be a boon for the country’s leaders as they seek to contain a dangerous build-up in debt that has ballooned to 277 percent of GDP.
“(The new data) is encouraging for global growth as well because China is the second largest economy on the planet,” said Craig James, chief economist at Commonwealth Securities in Sydney.
“Based on this data, there is no need for easing and no need really for tightening either because inflationary pressures are very much contained. So I think the People’s Bank of China just continues to be watchful.”