China growth steady despite crackdown on financial risks

Marco Green
July 17, 2017

China's average per capita disposable income grew 8.8 percent year on year to 12,932 yuan (about 1,913 USA dollars) in the first half of the year, data showed Monday.

Despite concerns of the fallout from risks in the financial system, analysts say stability is the word of the day ahead of a once-every-five-years Communist Party Congress coming in the fall when a leadership shuffle is expected. Analysts had predicted a slight cool-down in the second quarter, to growth of 6.8 percent.

China reported second quarter growth data Monday that topped expectations.

Last week's data showed that China's exports, as well as imports in June, grew more than expected from a year before, which may offset sluggishness in other parts of the economy in the second quarter of this year.

Economist Zhou Hao thinks so too saying that even though the country was better than expected in the first half of the year, a slowdown was likely to happen.

The meeting is usually overseen by Premier Li Keqiang, but this year, President Xi Jinping also addressed the conference, making it clear the main focus was to reduce financial risks.

In contrast, the output of raw coal increased 10.6 percent year on year to 310 million tonnes in June, the fourth consecutive month of growth, the NBS said in a statement.

Beijing has set a growth target of around 6.5 percent for 2017, a tad lower from 6.7 percent in 2016, which was the country's lowest rate in 26 years.

In the first six months, crude oil output dropped 5.1 percent year on year to 96.45 million tonnes.

Craig James, chief economist at Commonwealth Securities in Sydney believes though that measures to be taken by the central bank will not be so severe. But growth is being pressured as Beijing tightens controls on bank lending to rein in a surge in debt levels.

The NBS said that GDP for tertiary industries - predominantly services - grew by 7.7%, outpacing growth in the nation's secondary (industrial) and primary industries of 6.4% and 3.5% over the same period.

The surplus with the United States was $25.4 billion in June, up from $22.0 billion in May, official data showed last week, and its widest since October 2015, according to a Reuters calculation.

Other reports by Click Lancashire

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