China’s factories expected to see solid growth in August

China’s factories likely posted another solid month of growth in August, suggesting the world’s second- largest economy is still growing at a healthy clip despite rising financing costs and a cooling housing market, a Reuters poll showed.

The official manufacturing Purchasing Managers’ Index ( PMI) is expected to come in at 51.3 for August, down just a hair from July’s 51.4, according to a median forecast of 39 economists polled by Reuters.

That would signal the 13th straight month of expansion for China’s manufacturers, who are enjoying their best profits in years thanks to a government- led construction boom and a recovery in exports. The 50- mark divides expansion from contraction on a monthly basis.

Driven by strong infrastructure spending and record bank lending last year, China’s economy grew by a faster- than- expected 6.9 percent in the first half of 2017 and looks set to easily meet the government’s fullyear target of around 6.5 percent.

That momentum has given policymakers room to focus on tackling financial risks stemming from a rapid buildup in debt and an overheated property market.

Economists expect such cooling measures will start to drag on growth eventually, but do not foresee any sharp slowdown, especially as the government is keen to ensure stability ahead of a key Party meeting to be held in the autumn.

“Given that the economy is slow- ing from an elevated position, the central government’s focus should change to stability concerns in place of a focus on economic growth,” analysts at Sun Hung Kai Financial said in a note on Monday.

Some signs of fatigue may already be starting to show.

China’s import and export growth slowed more than expected in July, raising worries about domestic demand. Industrial output, investment, and retail sales also underwhelmed in July, while bank lending and money supply growth also slowed.