China’s better-than-expected growth in the second quarter showed a solid economic foundation, powerful driving forces and effective industrial restructuring, a Chinese macro economist said on Aug 5.

The gross domestic product (GDP) expanded 7 percent from a year ago, the same with the first quarter, beating the market forecast of a further slip, official data released in July showed.

Zhang Xiaoqiang, executive deputy director of China Center for International Economic Exchanges, told Xinhua in an exclusive interview that a flourishing service sector helped the economy hold steady against downward pressure.

In contrast with the slowing manufacturing industry, the tertiary sector grew 8.4 percent from a year ago in the first half, contributing up to 49.5 percent of the GDP.

“The increase in the service sector offset the impacts from a sluggish second industry, which was significant in stabilizing growth and creating new jobs,” Zhang said.

Zhang said the shift in economic drivers can also explain the inconsistency between steady growth in the broader economy and some lackluster data including power use and freight volume, which were dubbed as advanced indicators when the second industry prevailed.

The change showed China’s progress in adjusting economic structure and dissolving industrial overcapacity, he said, dismissing a contradiction in economic figures.

“China should continue to adapt itself to a ‘new normal’ period, reinforce the encouraging trend and prompt a healthy economy,” Zhang said.

Chinese policymakers are steering the economy into a new path that features less eye-catching growth but emphasizes quality and efficiency. The progress appeared to be satisfactory as new economic engines are emerging and overhauls in overly-invested industries have accelerated.

When responding to questions on the accuracy of the official GDP, Zhang pointed out forecasting the economy has always been a tough task, especially when the economy is approaching a turning point.

“The difference between predictions and the real GDP could be attributable to the fact that an inflection point drew close in the second quarter, which was not expected by some researchers,” Zhang said.

He said the economy showed signs of picking up in the end of the first half, indicated by rebounding exports and warming factory activity.

In June, China’s exports rose 2.1 percent from a year earlier, ending a three-month losing streak; the manufacturing purchasing managers’ index, a key measure of factory activity, stayed at 50.2, and that of services sector rose moderately to 53.8, well above 50-point mark that separates expansion and contraction.

Given the trend, economists said the economy has bottomed out and predict continued improvement during the rest of the year.