China’s economy grew an annual 7 percent in the second quarter, steady with the previous quarter and slightly better than analysts’ forecasts, Reuters reported.
The performance of the world’s second-largest economy came as a surprise amid slowing growth in trade, investment and domestic demand, which has been compounded by a cooling property sector, deflationary pressure, and most recently a stock market crash, the news agency said.
Analysts polled by Reuters had forecast gross domestic product (GDP) iwould grow 6.9 percent in April-June from a year earlier, compared with 7.0 percent in the March quarter.
On a quarterly basis, the economy grew 1.7 percent compared with 1.4 percent in the March quarter, the National Bureau of Statistics said on Wednesday.
Monthly activity data, released alongside the GDP report, also beat expectations, with factory output hitting a five-month high.
The statistics bureau said the changes, which included better-than-expected employment conditions, were “hard won” but further moves were needed to consolidate recovery.
“We must also take note that domestic and the external economic environment remains complex, and the global economic recovery is tortuous and slow,” the bureau said in a statement.
Data on Tuesday showed bank lending increased sharply in June, thanks to central bank support.
Fixed-asset investment rose an annual 11.4 percent in the first six months of 2015, the bureau said, while industrial output growth quickened to 6.8 percent. Retail sales quickened to 10.6 percent, suggesting a wider economic effect.
Some have questioned the accuracy of recent official data releases, saying they don’t fit with other signs of general weakness, in particular inflation data.
The statistics bureau on Wednesday insisted the growth data was accurate and rejected suggestions that figures were being inflated.
However, it’s not just the government that has been reporting a warmer second quarter; the recent independent China Beige Book survey also reported signs of a broad-based recovery for the period, which it said was largely driven by growth in the interior provinces.
“While actual growth is almost certainly a percentage point or two slower than the official figures show, there are good reasons to think that the latest figures are mirroring a genuine stabilization of conditions on the ground,” wrote Singapore-based economist Julian Evans-Pritchard of Capital Economics.
“One reason is that the surge in brokerage activity associated with the equity bubble feeds directly into the service sector component of GDP. Perhaps more importantly, there is growing evidence of an improvement in the wider economy.”
Chinese stock markets did not celebrate the news, however, with benchmark indexes down nearly 3 percent in morning trade.
“The data is largely in line with market expectations, and thus there will be no major impact on the stock market,” said Zhang Qi, senior stock analyst at Haitong Securities in Shanghai.
The government has forecast economic growth of around 7 percent for 2015, which would be the weakest rate in 25 years.
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