China's crude oil output dips in June

Xavier Trudeau
Juillet 17, 2017

The gross domestic product grew to 38.15 trillion yuan (US$5.62 trillion) in the first half, up 6.9 percent year on year.

On a sequential basis, economic growth improved to 1.7% from 1.3%. Its solid growth reinforces recoveries for commodity exporters and keeps 2017's pickup in global growth on track.

Economists polled by Reuters on average had expected 6.8 percent growth in the April to June period against the same time previous year, compared to the first quarter's 6.9 percent.

However, he did not expect that strength to last due to the recent crackdown on financial risks - which had led to slower credit growth.

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.

The performance was ahead of the government's target figure of "around 6.5 per cent" and was also better than most analysts' predictions.

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 Xi the most powerful leader in a generation.

Debt-fuelled investment in infrastructure and real estate has underpinned China's growth for years but warnings of a potential financial crisis have spurred Beijing to clamp down.

Craig James, chief economist at Commonwealth Securities in Sydney believes though that measures to be taken by the central bank will not be so severe.

Economist Craig James said that based on the data, easing and tightening are really not necessary since inflationary pressures are very much contained therefore PBOC should just remain to be observant.

The service sector, already accounting for 54.1 per cent of the overall economy, expanded 7.7 percent year on year in the first half, outpacing a 3.5 percent increase in primary industries and 6.4 percent in secondary industries, according to NBS data.

With China and the United States set to begin economic talks on Wednesday, simmering trade tensions are sure to be a major topic and firm Chinese export numbers will certainly keep the point of contention elevated.

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