China posts 6.9 percent GDP growth in H1

Xavier Trudeau
Juillet 17, 2017

Industrial output for June grew by 7.6%, well above the forecast 6.5%.

It attributed the growth to online sales, which surged 33.4 percent year-on-year in the first six months of 2017.

The figure, marginally ahead of forecasts looking for an increase of 6.8%, was the tenth consecutive GDP report where the year-on-year growth rate was either in line with expectations or exceeded them by 0.1%.

The main Asian stock indexes fell on the data, before recovering to close the day at new highs.

On a sequential basis, economic growth improved to 1.7% from 1.3%.

For the April-June period, a large number of analysts had predicted that the Asia powerhouse's growth to slip to 6.8 percent, while the Chinese government is trying to curb a ballooning debt pile and tame hot property prices.

However, growth is expected to slow over the remainder of the year as Beijing seeks to cool a red-hot housing market and attempts to rein in leverage.

The Chinese economy expanded at a faster pace in the second quarter, with broad measures of economic growth picking up speed.

The economy grew 6.9 percent in the second quarter from a year earlier, the same rate as the first quarter, but analysts expect slower growth over the rest of the year as policymakers seek to reduce financial risk.

President Xi Jinping called for tougher regulations to contain financial risks during a weekend National Financial Work Conference, which sets the tone for reforms.

What that translates to is tighter control over the financial system and the economy, which could pose further strains as China's economy transitions to new sources of growth.

Industrial production rose 7.6% year-on-year, while fixed asset investment investment increased 8.6% in the first half of the year.

Last week's data showed that China's exports, as well as imports in June, grew more than expected from a year before, which may offset sluggishness in other parts of the economy in the second quarter of this year.

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