Published: Mon, July 17, 2017
Business | By Max Garcia

China GDP growth surprises on the upside

China GDP growth surprises on the upside

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.

Other than the unevenness in the economy, China's investment growth is also likely to moderate in the second half of this year.

The country's gross domestic product grew 6.9% in the second quarter, according to government data released Monday, the same figure as the previous quarter and marginally higher than most forecasts.

The Chinese government has sought to dampen soaring property prices in recent months by rolling out a host of restrictive measures, indicating real estate is a major contributor to economic growth.

Fixed-asset investment in non-rural areas increased 8.6% in the first half of the year.

A survey by China's central bank in late June showed that 31.2 percent of households expect housing prices to rise in the third quarter of this year, while 46.1 percent of households tipped them to remain basically unchanged.

On a quarter-on-quarter basis, GDP expanded 1.7% between April and June. Retail was another bright sport, jumping by 11 percent from a year earlier. Studies over the years have found that China's national statisticians appear to overstate growth during periods of economic weakness and understate growth when the economy is booming.

The composition of Chinese exports also changed in ways that could intensify trade friction and affect China's trade surplus.

Some analysts have said that the property market could turn out to be a bubble.

According to NBS, the service sector expanded 7.7 per cent year-on-year in the first half, outpacing a 3.5-per cent increase in primary industry and 6.4 per cent in secondary industry.

"Overall, China's Q2 economic performance provides a favorable backdrop for the authorities to push forward with their structural reforms, including those highlighted at the National Financial Work Conference held over the weekend", ANZ Bank economists said in a note.

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