Chinese growth beats expectations at 6.9pc

Marcus Newton
July 17, 2017

Therefore, the second-quarter upturn could be a boon for the country's leaders as they seek to contain a unsafe build-up in debt that has ballooned to 277 percent of gross domestic product (GDP).

Benefiting from a pickup in overseas demand, the total value of Chinese exports registered a year-on-year increase of 15 percent in the January-June period.

Separate readings on industrial production, fixed asset investment and retail sales for June all came in ahead of forecasts.

The International Monetary Fund has forecast China's full-year growth for 2017 to hold steady at last year's level of 6.7% due to strong government spending.

This was up from the 6 percent increase in the same period of previous year, according to the National Bureau of Statistics. The result outpaced an expectation for 6.8% growth by economists polled by The Wall Street Journal.

The high-tech and equipment manufacturing sectors are leading the country's industrial growth, with year-on-year output increases of 13.1 percent and 11.5 percent in the first half, respectively, compared with a 6.9 percent rise in overall output.

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Many analysts expected China's economy to slow as those policies kicked in. This means that investment growth has already peaked in Q1, and a softening can be expected in the coming quarters, Commerzbank reported.

In spite of government efforts to curb property prices, household loans - mostly mortgages - rose to 738.4 billion yuan in June from 610.6 billion yuan in May, according to Reuters calculations based on data recently released by China's central bank.

It is also on track to post its first annual acceleration in growth since 2010, with gross domestic product having expanded 6.7% in 2016.

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

In the latest alert, Fitch Ratings on Friday said China's growing debt could trigger "economic and financial shocks" even as it maintained its A-plus rating for the country.

Other reports by MaliBehiribAe

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