China economic growth steady in second quarter

Jay Anderson
July 17, 2017

"Overall, the economy continued to show steady progress in the first half", the bureau's statement said.

Over the half, China produced 419.75 million tonnes of crude steel, up 4.6% on the same period a year earlier.

Gross Domestic Product (GDP) of the country grew by 1.7% in April-June on Q-o-Q basis, reported the National Bureau of Statistics on Monday. Factory output and retail sales clocked 7.6 and 11 per cent growth respectively.

The second quarter numbers put the economy on a strong footing to meet China's growth target of around 6.5 percent in 2017, which would give policymakers room to defuse financial risks.

The Communist Party Congress, which is held once every five years and chooses the country's top leadership, will be in mid-autumn. "So I think the People's Bank of China just continues to be watchful".

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

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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.

There is fear that growing debt in the manufacturing sector could combine with overcapacity to drag the economy down, and there are also worries that large cities are now in the middle of a property bubble.

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

Data from NBS showed that industrial output climbed 7.6% annually, faster then the 6.5% increase logged in the prior period. The trade surplus widened from $US40.8 billion in May to $US42.8 billion in June.

New construction starts measured by floor area, a telling indicator of developer confidence, rose 14.0 percent in June, the highest since October 2016, according to Reuters calculations.

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