China’s second quarter GDP growth slips to 6.7%

BEIJING: China’s economy expanded at a slower pace in the second quarter as Beijing’s efforts to contain debt hurt activity, while June factory output growth weakened to a two-year low in a worrying sign for investment and exporters as a trade war with the United States intensified.

The world’s second-largest economy grew 6.7% in the last quarter year-onyear – matching expectations – and looks set to meet the official 2018 growth target of around 6.5%, though the trade row with Washington, a slowing property market and lower shipments have sharply increased the risks to the outlook.

“We expect growth in H2 to be challenged by the slow credit growth and softer real estate activity. Also, the intensifying trade conflict with the US will start to weigh on growth,” Louis Kuijs, head of Asia economics for Oxford Economics in Hong Kong, wrote in a note.

The second quarter GDP figure was slightly below the first quarter’s 6.8%, the National Bureau of Statistics said yesterday, with net exports making a dent on overall first half economic growth.

As the trade tussle with Washington shows no signs of ebbing and the external sector continues to weigh on China’s economy, more timely monthly activity data indicated growth was slowing at a faster pace going into the second half of the year.

First-half fixed asset investment growth was a record low, while industrial output for June matched the slowest growth rate in over two years at 6% and missed forecasts centered on 6.5% expansion.

The data weighed on Asian markets, adding to concerns about the impact from the Sino-US trade war on economic growth in China and the rest of the world. The Shanghai Composite index and the blue-chip CSI300, the world’s worstperforming major indexes this year, each fell over 0.7%. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.5%.

On a quarterly basis, growth picked up 1.8% from 1.4% in the first quarter, beating expectations of 1.6% growth. – Reuters