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

Randall Padilla
July 17, 2017

China's gross domestic product rose 6.9 percent in the second quarter from a year earlier, the same rate as the first quarter, the National Bureau of Statistics said on Monday.

An NBS survey into China's 40,000 small and micro-firms, crucial businesses in the country's pursuit of new and inclusive economic growth, showed that the business climate index of these firms reached a two-year high of 96.5 percent in the second quarter.

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

In the first half of 2017, the economy advanced 6.9%.

On a quarter-on-quarter basis, GDP expanded 1.7% between April and June.

The annual growth was forecast to slow to 6.8%.

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

According to the bureau, industrial output rose 7.6 percent in June from a year earlier, compared with an estimated 6.5 percent.

Primary industry posted the fastest FAI growth, up 16.5 percent year-on-year, followed by the service industry with an increase of 11.3 percent and 4 percent in the secondary industry.

"What is important to note is that this is heavily driven by credit and fixed-asset investment", said Christopher Balding, an associate professor at the HSBC School of Business at Peking University in Shenzhen.

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

In terms of de-stocking in the property market, the floor space of unsold homes were down 9.6 percent at the end of June.

The Chinese government announced last week it would change the way it calculated economic growth for the first time in 15 years, adding healthcare, tourism and the "new economy" to the overall figure.

Fitch Ratings on Friday maintained its A-plus rating for the country but said its growing debt could trigger "economic and financial shocks".

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