China Q2 GDP Growth Weakest in 27 Years


The Chinese economy advanced 6.2 percent year-on-year in the second quarter of 2019, slowing from a 6.4 percent expansion in the previous three-month period and matching market expectations. It was the lowest growth rate since the first quarter of 1992, amid ongoing trade tensions with the US, weakening global demand and alarming off-balance-sheet borrowings by local governments.

China's economy expanded 6.3 percent in the first half of the year, with final consumption accounting for 60.1 percent of the GDP.The value added of the primary industry was up by 3.0 percent; the secondary industry by 5.8 percent; and the tertiary industry by 7.0 percent.

Industrial production grew 6 percent from a year earlier in the January to June period. For June only, factory output expanded 6.3 percent year-on-year in June 2019, accelerating from a 5 percent growth in the previous month and beating market consensus of 5.2 percent, boosted by increases in production of manufacturing (6.2 percent vs 5 percent in May), utilities (6.6 percent vs 5.9 percent) and mining (7.3 percent vs 3.9 percent). By industry, output growth accelerated for textiles (1.6 percent vs 0.7 percent); chemicals (5.4 percent vs 3.5 percent); ferrous metals (13.7 percent vs 11.7 percent); general equipment (2.6 percent vs 2.5 percent); transport equipment (14.5 percent vs 8.3 percent); machinery (11.3 percent vs 8.8 percent); and power equipment (5.6 percent vs 5 percent). Meanwhile, production slowed for non-metal minerals (9.5 percent vs 9.9 percent) and communication (10.4 percent vs 10.6 percent).

Retail sales rose 8.4 percent year-on-year in the first six months of the year. In June retail trade jumped 9.8 percent year-on-year in June 2019, after an increase of 8.6 percent in May and well above market expectations of 8.5 percent. That was the steepest advance in retail trade since March 2018, boosted by sales of automobiles (17.2 percent vs 2.1 percent); garments (5.2 percent vs 4.1 percent); cosmetics (22.5 percent vs 16.7 percent); jewelry (7.8 percent vs 4.7 percent); personal care (12.3 percent vs 11.4 percent); home appliances (7.7 percent vs 5.8 percent); office supplies (6.5 percent vs 3.1 percent); furniture (8.3 percent vs 6.1 percent); oil, oil products (3.5 percent vs 3.1 percent); and building materials (1.1 percent vs -1.1 percent). Meanwhile, sales of telecoms rose at a softer 5.9 percent, compared to 6.7 percent in May.

China's fixed-asset investment increased 5.8 percent year-on-year to CNY 29.91 trillion in the first half of 2019, compared to a 5.6 percent rise in the first five months of the year and beating market consensus of 5.6 percent, as private investment growth accelerated (5.7 percent vs 5.3 percent in January-May) while public investment lost momentum (6.9 percent vs 7.2 percent). By sector, fixed-asset investment went up faster for: manufacturing (3.0 percent vs 2.7 percent); transport, storage and postal industry (5.1 percent vs 5.0 percent); and water conservancy, environment and public facilities management (2.5 percent vs 1.4 percent). Meanwhile, fixed-asset investment expanded softer for mining (22.3 percent vs 26.1 percent) while declines were recorded in investment in both utilities (-0.5 percent vs 0.8 percent) and agriculture, forestry, animal husbandry; fishery (-0.8 percent vs -2.7 percent).

Figures released earlier showed exports edged up 0.1 percent in the first half of the year while imports slumped 4.3 percent. For June only, exports fell 1.3 percent from a year earlier to USD 212.84 billion, after tariffs on USD 200 billion of Chinese goods were raised from 10 percent to 25 percent by Washington in May, while purchases tumbled 7.3 percent to USD 161.86 billion.

On a quarterly basis, the economy grew by 1.6 percent in the second quarter, the strongest pace of expansion since the third quarter of 2018.

China Q2 GDP Growth Weakest in 27 Years


Statistics China | Rida Husna | rida@tradingeconomics.com
7/15/2019 8:27:11 AM