China’s economy expanded at a faster-than-expected 6.9 percent year-on-year in the second quarter and economists said the trend of stable growth is set to continue into the second half of 2017, paving the way for the country to strengthen reforms.
The economy, as measured by the gross domestic product, was unchanged from the first quarter and has remained in the 6.7 to 6.9 percent range for eight consecutive months, according to data released on July 17 by the National Bureau of Statistics. GDP growth accelerated to 1.7 percent in the second quarter, up from 1.3 percent in the first quarter.
Key indicators, such as industrial output, retail sales and fixed-asset investment, all were at high levels in the second quarter, the NBS said. Real estate investment, a key driving force of growth, increased by 8.5 percent in the first half of this year, slightly down from the first quarter. “Real estate investment, together with infrastructure investment, remained brisk and contributed to the strong growth in the second quarter,” said Yu Yongding, an economist with the Chinese Academy of Social Sciences.
The economic structure also has improved, according to NBS data. For example, investment in high-tech manufacturing industries grew by 21.5 percent year-on-year in the first half of this year, 12.9 percentage points higher than overall investment growth.
The crucial job market, meanwhile, remained stable, with 7.35 million jobs created in urban areas in the first half of this year, 180,000 more than a year earlier, according to the NBS.
Looking ahead, China’s economic growth may ease moderately, mainly due to slowing growth expected in real estate investment thanks to the country’s tightening of price control policies, but it faces much less pressure to grow, analysts said.
“The economy may continue to fluctuate a little bit, but there would not be sharp declines, and China does not face any risk of a hard landing,” said Yu of CASS, who also is former member of the monetary policy committee of the People’s Bank of China, the central bank.
China’s whole-year growth this year may reach 6.7 percent, meaning it will meet its target of “around 6.5 percent”, according to forecasts by some institutions, such as the China Center for International Economic Exchanges and investment bank ICBC International.
“China’s pressure from growth stabilization has eased greatly and it will pave way for its macroeconomic maneuvers to upgrade its economic structure and contain risks,” said Cheng Shi, chief economist at ICBC International.