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Faster growth points to a lasting recovery

THE acceleration of China’s economic growth in the second quarter of the year exceeded market expectations, with a series of data indicating lasting recovery in the world’s second-largest economy.

China’s second-quarter GDP rose 6.9 percent year on year, unchanged from the first quarter, National Bureau of Statistics data released yesterday showed.

That compared with an expected 6.8 percent increase and last year’s 6.7 percent annual increase.

“The economic growth in the first half can be concluded into two sentences — the stable conditions are more consolidated, and the good trend is more obvious,” said the bureau’s Xing Zhihong. “The pace of growth was stable, employment continued to improve, prices were generally stable, and international payment continued to improve.”

He said the consumer and manufacturing sectors continued to strengthen and the quality of economic growth was improving.

Sales of consumer goods rose 10.4 percent year on year in the first half, 0.4 percentage points faster than in the first quarter.

China’s industrial output expanded 6.9 percent year on year in the first half, compared with the first quarter’s 6.8 percent.

Fixed-asset investment growth slowed to 8.6 percent in the first half from the first quarter’s 9.2 percent.

Sales of residential property in terms of area rose 13.5 percent in the first half, compared with the first quarter’s 16.9 percent increase.

“China’s second-quarter GDP report beat expectations again, as details of the June activity data pointed at broad-based strength, with June industrial production, retail sales and FAI all coming in above expectations,” said Zhu Haibin, JPMorgan China’s chief economist. “The stronger-than-expected June activity reversed the softening momentum in April-May and suggested that China’s growth momentum remained solid and stable in the near term.”

The bank raised China’s full-year growth forecast from 6.7 percent to 6.8 percent.

Third-quarter growth forecast was revised up to 6.6 percent from 6.4 percent, while the fourth-quarter prediction was revised down to 6.2 percent from 6.4 percent, dragged by weaker real estate investment and tighter regulation on financing activities.

The National Financial Work Conference at the weekend confirmed a hawkish stance over reining in leverage and financial risks. The conference outlined tasks to make the financial sector serve the real economy better, contain financial risks, and deepen financial reforms.

Economists interpreted its tone as to tighten risk management in the financial sector.

Other major indicators also revealed a resilient economy.

China’s disposable income per capita stood at 12,932 yuan (US$1,910) in the first half, an increase of 7.3 percent if taking account of inflation.

In the job market, 7.35 million new jobs were created and the surveyed unemployment rate was under 5 percent in June for the second consecutive month, NBS data showed.

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