China’s GDP grows 6.9% in Q2 as industrial output, consumption pick up

The Dollar Business Bureau

Chinese economy witnessed a faster growth in the second quarter of this year as industrial production and consumption improved and investment continued to be strong.

The economy grew 6.9% in the April-June period 2017 compared to previous year, at the similar rate during the first quarter, China’s National Bureau of Statistics said on Monday.

On a quarterly basis, the growth improved to 1.7% in the second quarter from 1.3% during the first quarter this year.

Strong retail sale and industrial production data supported offset of a slow start for Chinese stocks that may have been connected to the talks of stricter financial regulations.

“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,” said the statistics bureau in a statement.

The world’s second largest economy is aiming a growth of about 6.5% in the current year, a little lower than previous year’s actual 6.7%, which grew at the slowest pace in the last two-and-half decade.

The factory output rose 7.6% in the month of June compared to a year earlier, recording the fastest growth in the past three months, whereas fixed-asset investment increased 8.6% in the first half of this year.

The country’s retail sales recorded a growth of 11% in June compared to a year earlier, which was the fastest since December 2015.

Revival in demand for the Chinese products globally could be a gain for the government as it is seeking to limit a dangerous build-up of debt which has surged to 277% of gross domestic product (GDP).

Steel production in the world’s top producer increased 5.7% in June to a new high of 73.23 million tonnes, as steel mills ramped up the production because of high gains from rallying prices.

This comes in spite of China’s leaders pushing for supply-side reforms to reduce additional capacity in coal and steel sectors.

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.