China's GDP, economic data beat expectations
Jul 17, 2017 under Business/Economy 516 , Australia 90 , National 834
China's economy has continued to beat expectations, with its economic growth coming in slightly ahead of analyst forecasts. According to official data released on Monday,China's gross domestic product has maintained its annual growth rate at 6.9 per cent. The typical forecast was for a slight slowdown in year-on-year growth to 6.8 per cent in the June quarter. Likewise, urban investment in June remained steady with an 8.6 per cent annual growth rate - which was slightly better than what economists had predicted. As for factory output and retail sales, they came in well ahead of expectations - at 7.6 and 11 per cent growth respectively. Higher global demand for China's products will help the country contain its massive debt levels - currently 277 per cent of GDP.
China-Australia outlook
China is targeting slower annual economic growth of around 6.5 per cent this year. This is lower than the 6.7 per cent pace recorded in 2016 - and would be the slowest growth in 26 years.
"Overall, the economy continued to show steady progress in the first half ... but international instability and uncertainties are still relatively large, and the domestic long-term buildup of structural imbalances remain," China's National Bureau of Statistics said in a statement which accompanied the data.
Julian Evans-Pritchard, the China economist at Capital Economics, has an even more cautious take on the data. "We don't expect the strength to be sustained," said . "The recent crackdown on financial risks has driven a slowdown in credit growth, which will weigh on the economy during the second half of this year." But Commsec's chief economist Craig James has a more optimistic take. "A strong Chinese economy is very much in Australia's interests and it continues to drive the global economy," Mr James said.
He also noted that the latest Chinese data is "encouraging" for the Reserve Bank of Australia. "The latest data gives the Reserve Bank more reason to stay on the interest rate sidelines. "And interest rate hikes seem more likely in mid-to-late-2018 than interest rate cuts in the short-to-medium term."
After the China figures were released, the local share market rebounded from its morning trading losses. At 1:55pm (AEST) the ASX 200 index had risen slightly - by 0.07 per cent - to 5,763.
Tagged: China 99, Economy 17, Business 19, Trade 14, Finance 22, Exports 4, Imports 6, GDP 1, Australia 109
