China's second quarter growth beats expectations at 6.9%

Cornelia Mascio
Luglio 17, 2017

In terms of quarterly rates of change, GDP picked up from 1.3% to 1.7%.

Forecasters expect economic growth to cool later this year as those credit controls take hold, depressing investment.

The growth only proves the strength of China's economy despite policy makers' efforts to limit extreme and risky borrowing which causes a sluggish advancement in money supply.

China's economy grew a faster-than-expected 6.9 percent in the second quarter from a year earlier, matching the robust first quarter rate.

The ChiNext, the start-up board at the Shenzhen Stock Exchange, was down nearly 5 percent on the day, but recovered somewhat as trade continued.

Meanwhile, retail sales in June increased by 11 per cent compared to the same month in 2016, and a month-on-month increase stood at 0.93 per cent.

But a sharp slowdown in the second half is unlikely as policymakers prepare for an important Communist Party congress later this year that will likely make President Xi Jinping the most powerful leader in a generation.

The data helped push regional stocks, in the form of the MSCI Asia ex-Japan index, past a two-year high in overnight trading while the yuan gained for a sixth consecutive session against the US dollar after the People's Bank of China raised the midpoint of the currency to 6.7562, its highest level in more than 8 months.

Risks loom, however, over the world's second largest economy.

However, analysts say the central bank is likely to sit tight for now.

"Based on this data, there is no need for easing and no need really for tightening either because inflationary pressures are very much contained".

"The national economy performed within an appropriate range with more visible good momentum and achieved steady growth, rise in employment, stable prices, income growth and optimizing structures", said the NBS.

The services sector led the growth with an increase of 7.7 percent, while the manufacturing and the agriculture added 6.4 percent and 3.5 percent separately.

The surplus with the United States was $25.4 billion in June, up from $22.0 billion in May, official data showed last week, and its widest since October 2015, according to a Reuters calculation. That was matched by Monday's data.

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