The world’s second biggest economy grew 6.7 per cent year on year in April-June, slightly quicker than forecast in an AFP survey and the same as the year’s first quarter.
The result is also in line with the government’s 6.5-7.0 target for the full year and will provide some relief as China — and key driver of the global economy — suffers its worst rates of growth for 25 years.
“The national economy has achieved moderate but steady and sound development,” National Bureau of Statistics spokesman Sheng Laiyun said.
However analysts said much of the expansion was driven by state investment in infrastructure and credit growth, suggesting it may be hard to maintain in the longer-term. Markets were unmoved by the figures, with Shanghai’s composite index ending the day flat.
“China is on track of achieving this year’s growth target,” said Zhu Haibin, JP Morgan China chief economist. But he added that “investment continues to be on the weak side, especially private investment”.
After decades of breakneck growth policymakers claim to be embracing weaker expansion as a trade-off for structural reforms to wean the country off cheap exports and massive government spending in favour of domestic consumption. But the latest figures show the transformation is proving tough, with mounting debt a key concern for global investors.
Fixed asset investment, a gauge of infrastructure spending, rose nine per cent in the first half of the year following a record credit binge in the first quarter aimed at stimulating the economy.
New bank loans jumped to nearly 1.4 trillion yuan in June, the central bank said today, up dramatically from around one trillion the previous month, as borrowers took advantage of loosened lending standards put in place by Beijing.
Investment by private businesses grew by less than three per cent in the first half of the year, with Sheng blaming overcapacity in traditional industries, barriers for private firms to enter some sectors, and limited access to loans.
Tom Rafferty of EIU said the “greatest concern” is the slide in investment by private firms, in a sign businesses are worried about the wider economy and Beijing is “failing to deliver on promised market reforms”.
China bullet trains cross at record speeds in global first
Two Chinese trains running at world-record speeds in opposite directions on Friday crossed each other on parallel tracks, in the latest feat achieved by China in high-speed rail.
The two trains - “Golden Phoenix” and “Dolphin Blue” - travelling at 420 km per hour crossed on lines between Zhengzhou in the central Henan Province and Xuzhou in the eastern Jiangsu Province.
The experiment set a world-first for trains travelling at such speed, Zhou Li, head of technological management department of China Railway Corporation, told state-run Xinhua news agency.