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Chinese GDP grows 6.9%, topping expectations

WANG ZHAO / AFP / Getty Images

Chinese economic growth topped expectations yet again in the June quarter with GDP expanding 6.9% from a year earlier.

The figure, marginally ahead of forecasts looking for an increase of 6.8%, was the tenth consecutive GDP report where the year-on-year growth rate was either in line with expectations or exceeded them by 0.1%.

An uncanny run of stability compared to other major economies over the same period.

For the quarter, China’s National Bureau of Statistics (NBS) said the economy grew by 1.7% in seasonally adjusted terms, in line with expectations but higher than the 1.3% increase reported in the March quarter.

“The national economy performed within an appropriate range with more visible good momentum and achieved steady growth, rise in employment, stable prices, income growth and optimizing structures,” said the NBS.

“Generally speaking, the national economy has maintained the momentum of steady and sound development in the first half of 2017, laying a solid foundation for achieving the annual target and better performance.”

The Chinese government previously stated that it is aiming for a minimum growth rate of 6.5% this year, a result that looks more than achievable given the strength seen in the first half of the year.

The NBS said that GDP for tertiary industries — predominantly services — grew by 7.7%, outpacing growth in the nation’s secondary (industrial) and primary industries of 6.4% and 3.5% over the same period.

Despite the strong result, the NBS said that that there are “still many unstable and uncertain factors abroad and long-term structural contradictions remain prominent at home”.

On the latter, the NBS said that overcapacity was “addressed in a well-ordered way” noting that capacity utilisation rates across the nation’s industrial sector rose from a year earlier while real estate inventory “continued to be reduced”. It also said that leverage of enterprises “was brought down”.

Like the GDP report, separate data on industrial output, retail sales and urban fixed asset investment all topped market expectations for June.

The NBS said that industrial output grew 7.6% year-on-year in June, equaling the fastest rate of growth reported since December 2014.

It was well above the 6.5% pace recorded in the year to May, and breezed past expectations for unchanged reading for the month.

Retail sales also impressed, lifting by 11% from a year earlier.

That was the fastest annual increase since December 2015, accelerating away from the 10.7% level reported in May.

It also beat forecasts for a moderation to 10.6%.

Rounding off the quartet of data beats, urban fixed asset investment grew by 8.6% between January and June compared to the same period in 2016, topping the 8.5% pace expected by economists.

The figure was unchanged from the level reported in the first five months of the year.

The full press release from the NBS can be accessed here.

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