China's economy beats outlook, grows 6.9% in Q2

Paterniano Del Favero
Luglio 17, 2017

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.

Breaking both expectations and estimations, China's Dross Domestic Production in the first half of the year has grown 6.9 percent while the retail sector has risen to a stunning 10.4 percent.

China eliminated around 120 million tonnes of low-end steel capacity in the first six months of this year.

The statistics bureau urged that China should be "united even closer around the Party Central Committee with Comrade Xi Jinping at its core" to overcome any uncertain economic factors at home and overseas.

China's consistent growth also reflects the government's constant intervention as officials try to reach predetermined targets for the country's economy-currently 6.5-percent growth or better.

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 cement Xi's place as the most powerful leader in a generation.

China's economy expanded at a steady pace in the second quarter on domestic spending and exports despite measures taken to rein in financial risks.

Fixed asset investment was also up, with increases between January to June of 8.6% on year, ahead of expectations.

"If global demand for Chinese goods stays elevated, that will offset the curbs on growth that property and debt that the government has implemented", said Tao Wang, chief China economist at UBS.

Economists polled by Reuters expect the economy grew 1.7% between April and June-an annualised rate of 6.8%.

The bank has raised its 2017 annual GDP projection to 6.8 percent on-year from 6.6 percent previously.

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

Industrial production grew at a 7.6% year-on-year clip last month, after increasing by 6.5% in May (consensus: 6.5%).

"However, we must be aware that there are still many unstable and uncertain factors overseas and long-term structural contradictions remain prominent at home", Xing said. The trade surplus widened from $US40.8 billion in May to $US42.8 billion in June.

Meanwhile, data on Monday, which showed China's steel output hit a record in June, comes amid an investigation by the Trump administration into China's exports of steel and other metals.

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