China GDP Growth Beats Estimates in Q2


The Chinese economy advanced an annual 6.7 percent in the second quarter of 2016, the same pace as in the previous quarter. The figure was slightly above market expectations, driven by a faster increase in industrial output, retail sales and new yuan loans while fixed-asset investment eased.

Fixed-asset investment grew by 9.0 percent from a year earlier in January to June 2016, compared to a 9.6 percent rise in the first five months of 2016 and below market estimates of a 9.4 percent increase. Investment by private firms rose 2.8 percent year-on-year, slowing from a 3.9 percent growth in January to May 2016.

In June, industrial production expanded 6.2 percent year-on-year, up from 6.0 percent in May and better than market forecasts of a 5.9 percent growth. By categories, manufacturing output grew by 7.2 percent, followed by electricity, gas and water production and water supply (+4.0 percent). In contrast, the mining sector fell 2.4 percent. 

Retail sales rose at a faster 10.6 percent year-on-year, quickening from 10.0 percent in May and beating market expectations of a 10.0 percent growth. 

Figures released earlier showed exports fell 4.8 percent year-on-year to USD180.3 billion in June 2016, worse than market expectations of a 4.1 percent drop. In the last twelve months exports rose only in March (10.7 percent). Imports dropped by 8.4 percent to USD132.2 billion.  following a 0.4 percent decline in May and market expectations of a 5 percent drop. It is the 20th straight month of decline.

Considering the first half of the year, the services sector expanded 7.5 percent, down slightly from 7.6 percent in the first quarter. The industry sector advanced 6.1 percent, compared to a 5.8 percent growth in the previous three months. 

From January to June of 2016, final consumption accounted for 73.4 percent of Chinese economy. Meanwhile, investment contributed 37 percent of growth and net exports were a 10.4 percent drag on growth.

For 2016, the Chinese government is targeting the economy to grow between 6.5 to 7.0 percent. A year earlier, the economy expanded by 6.9 percent, the weakest since 1990.

On a quarterly basis, the GDP expanded by 1.8 percent, compared to an upwardly revised 1.2 percent growth in the first quarter. It was the strongest expansion in three quarters.

China GDP Growth Beats Estimates in Q2


National Bureau of Statistics l Rida Husna | rida@tradingeconomics.com
7/15/2016 1:22:26 PM