China’s growth accelerates to 7.5% in Q2

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China’s economic growth has hit 7.5 per cent year-on-year in April-June, ahead of expectations, as the world’s second-largest economy was boosted by government stimulus.

The second-quarter figure announced by the National Bureau of Statistics on Wednesday compared with 7.4 per cent in the previous three months and exceeded the median forecast of 7.4 per cent in a survey of 17 economists.

“Generally speaking, China’s economy showed good momentum of stable and moderate growth in the first half-year,” said NBS spokesman Sheng Laiyun.

“However, we should keep in mind that the domestic and international economic environment is still complicated and the national economy still faces many challenges.”

The NBS also said China’s economy expanded 7.4 per cent in the first half of the year.

The results come after Beijing introduced a series of policies in April in response to concerns over slowing growth, including tax breaks for small enterprises, targeted infrastructure spending and the encouragement of lending in rural areas and to small companies.

Wendy Chen, Shanghai-based economist with Nomura International, said: “A series of policy easing measures have taken effect, and the economy has already bottomed out and recovered.”

Growth would be “slightly better” in the second half of the year, she said, but added: “We expect more policy easing in the third quarter, in all aspects including the property sector.”

Despite the short-term stabilising effect of the efforts, which economists have dubbed “mini-stimulus”, some analysts remain pessimistic on the full-year outlook given persistent concerns over the huge but troubled property sector.

China’s economy grew 7.7 per cent in 2013, the same as 2012, which was the worst pace since 7.6 per cent in 1999.

For full-year 2014, the median forecast in an Agence France-Presse survey is for an expansion of 7.3 per cent – down from 7.4 per cent in the last quarterly poll three months ago.

If realised, 7.3 per cent growth would be the weakest annual performance since the 3.8 per cent of 1990 – the year after the Tiananmen Square crackdown.

China in March set its annual growth target for this year at about 7.5 per cent, the same as last year.

The objective is usually set conservatively so as to ensure being met.

The last time China missed the target was in 1998, during the turmoil of the Asian financial crisis.