China's 2nd-quarter GDP growth steady at 6.9%

Posted July 17, 2017

Investment in property development expanded 8.5 percent year on year for January-June, down from 8.8 percent during the first five months, according to the National Bureau of Statistics (NBS).

GDP for the second quarter was up 6.9% year-on-year with growth in the second quarter coming in at 1.7%.

Many analysts expect the Chinese economy to slow down in the second half of the year, due to policy measures to reduce housing prices and a rapid increase in debt.

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".

Nomura Securities said in a report after Monday's data release that given the data, it was raising the forecast for the third-quarter growth to 6.8 percent from the previous 6.6 percent, and the annual growth forecast to 6.8 percent from 6.7 percent.

Another aspect of concern for President Donald Trump is the fact that steel output hit a record high 73.23 million tons in June, the NSB said, while aluminium production rose 7.4% from the same period past year to 2.93 million tons.

Shilen Shah, bond strategist at Investec Wealth & Investment, said: "The better than consensus print for Chinese Q2 GDP suggests that the economy is maintaining momentum with both industrial output and fixed asset investment somewhat stronger than estimates".

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.

It accelerated to 7.9 percent in June from a year earlier, compared to a 7.3 percent expansion in May, according to Reuters calculations based on NBS data.

The stats bureau's data on Monday also showed domestic crude oil output fell 2.3% last month from a year ago to 16.21-million tonnes, or 3.94-million barrels a day, but up from May's 3.83-million barrels a day.

While fixed asset investment saw strong growth year-on-year of 8.6%, it was 0.6% lower from Q1.