China's strong Q2 GDP growth paves way for deeper reforms

The Chinese economy grew at a rate of 6.9 percent in the second quarter, a faster pace than expected and above the government's growth target.

Last year, the world's second-largest economy had its slowest growth rate in nearly 30 years, at 6.7 percent.

"But worldwide instability and uncertainties are still relatively large, and the domestic long-term buildup of structural imbalances remains". Chinese exports rose only 9.1 percent in the second quarter.

Industrial output expanded 6.9 per cent year on year in the first six months, against 6 percent in the same period last year.

Likewise, retail sales growth accelerated to 11% in June from 10.7% in May, while growth was expected to ease to 10.6%.

Debt-fuelled investment in infrastructure and real estate has underpinned China's growth for years but Beijing has launched a crackdown over fear of a potential financial crisis.

Progress is also being made in the country's supply-side structural reform and growth engine shift, according to the NBS.

The NBS said that GDP for tertiary industries - predominantly services - grew by 7.7%, outpacing growth in the nation's secondary (industrial) and primary industries of 6.4% and 3.5% over the same period.

Like the GDP report, separate data on industrial output, retail sales and urban fixed asset investment all topped market expectations for June. "Growth momentum has stayed pretty high and the authorities have really tamped down the pressures on the capital outflow", said Stephen Schwartz, head of Asia-Pacific sovereign ratings at Fitch.

Thus, China managed to exceed its target of 6.5 percent growth, set by the government for 2017.

The ratings agency on Friday maintained its A+ rating on China with a stable outlook.

June's total surpassed April's monthly record of 72.78 million tonnes, fuelling worries of a growing glut.

Growth in property development investment continued to decelerate in the first half of the year as the market showed signs of cooling, data showed Monday.

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