China’s gross domestic product expanded 7.5 per cent in the April-June quarter, a second consecutive slowdown in growth as worries mount over the health of the world’s second-biggest economy.
The GDP figure matched the median forecast in a survey of 10 economists by AFP. Growth in the first six months of the year came in at 7.6 per cent.
China’s economic performance in the first half was “generally stable” and within expectations, a National Bureau of Statistics spokesman said.
“However, we are still faced with grim and complicated economic situations,” he added.
Growth in the first three months of the year was 7.7 per cent, a decrease from the 7.9 per cent recorded in the last quarter of 2012.
Results so far this year have proved disappointing after last year’s 7.8 per cent annual performance, itself the worst in 13 years.
“As of now, China’s GDP (growth) has been staying under eight per cent for five straight quarters, a clear sign of distress,” economist Ren Xianfang of IHS Global Insight said.
“The rather sharp growth deceleration and the recent financial market turmoil indicate that risks have been building on both the financial and real goods sector,” she added.
Adding to uncertainty over the outlook are growing worries about China’s financial system, which was rocked last month when the interest rates banks charge each other surged to record highs.
“The liquidity crunch has exposed the extreme vulnerability of the financial system linked with excessive leveraging through shadow banking; while the GDP data indicate the economy is facing the risk of slowing to a stalling speed,” Ren added.
China’s leaders have proclaimed a long-term goal of rebalancing the economy, and since coming to power as Communist Party chief in November and then state president in March, Xi Jinping has placed less emphasis on the traditional growth drivers of exports and investment, and more on consumer spending.
“The figure is in line with market expectations,” said Lu Ting, Hong Kong-based economist with Bank of America Merrill Lynch.
“But the government may need to relax on the policy front if it wants to maintain its full-year economic growth target of 7.5 per cent,” he added.
“We don’t expect any major stimulus policies, but the government may relax on the fiscal policy side to support the development of some industries.”
Markets welcomed the news, with the Shanghai Composite Index up 0.81 per cent in the morning.
The NBS also announced that industrial production in June rose 8.9 per cent year-on-year and 9.3 per cent for the first six months of 2013.
Meanwhile fixed asset investment, a key measure of government spending on infrastructure, increased 20.1 per cent during the first half year-on-year.
And retail sales rose 13.3 per cent year-on-year in June and 12.7 per cent during the first half.
