Chinese economic growth remains stable at 6.7% in Q2 2016, as record incentives in the first quarter succeeded at least temporarily to ensure stable expansion of the country’s GDP. The Chinese economic growth was above analysts’ expectations after preliminary data showed weaker manufacturing exports and lower private investment. However, the recent statistics can ease the pressure over Beijing and lead to a more recent implementation of measures to stimulate the economy, which have proved ineffective during economic downturns.
On a quarterly basis, the GDP expanded by 1.8%, compared to a revised increase of 1.2% in the first quarter. This is the strongest expansion during the last three quarters. The average GDP growth in China amounted to 9.82% from 1989 to 2016, as the peak of 15.40% was reached in the first quarter of 1993 and a record low value of 3.8% was reported in the fourth quarter of 1990.
National statistics in turn announced a rise in industrial production by 6.2% yoy in June 2016, which is 0.2% more compared to the reported growth of 6% yoy in May.
Meanwhile, the investment in fixed assets increased by 9% yoy in the period January-June 2016 compared with growth of 9.6% in the first five months of the year. The retail sales rose by 10.6% yoy during the six months of the year, which is an increase compared to growth of 10% in May. In industrial production and trade data are better than expected, while investment failed to meet forecasts.
The Chinese Ministry of Finance announced that government spending increased by 19.9% yoy in June 2016, compared with growth of 17.6% in May.
However, that does not seem able to counteract the many effects of the crisis that hit the second largest economy in the world, increasing fears that China may fail to achieve the target for growth between 6.5% and 7% in 2016 for the third consecutive year.
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