China GDP growth beats Beijing target

17 Jul 2017   China

China’s economy expanded at an annual rate of 6.9 per cent in the second quarter, beating the government’s target in a year of political transition as unexpected strength in the property market kept growth humming. With 6.9 per cent growth in the first and second quarters, the Chinese economy is on track for its first year-on-year acceleration since 2010. Growth in gross domestic product was 6.7 per cent last year. In March China’s rubber-stamp parliament approved a full-year growth target of “around 6.5 per cent”. “As China goes, so go emerging markets. Its solid growth reinforces recoveries for commodity exporters and keeps 2017’s pick-up in global growth on track,” Bill Adams, senior international economist at PNC Bank, wrote on Monday. “The retreat of US long-term interest rates since early 2017 and the Fed’s commitment to a gradual pace of interest rate hikes are maintaining supportive monetary conditions for emerging market growth.” In the medium term, however, risks from rising debt and overcapacity in large swaths of the manufacturing sector still loom over the economy. The strong property sector was crucial to the first half’s strong growth, but many experts worry that the market is in a bubble, especially in large cities.

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