China posts 6.9 percent GDP growth in H1

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China's economy expanded at an annual 6.9% clip in the three months ending in June, the National Statistics Bureau (NSB) said, a rate that was modestly faster than the 6.8% pace anticipated by analysts but largely in line with the rate of growth over the first quarter.

Industrial output for June grew by 7.6 percent, well above the forecast of 6.5 percent, and retail spending rose by 11 percent compared to June the previous year.

With two quarters of GDP expansion at 6.9 percent against a lower full-year target, the Chinese government will now have greater tolerance of slower growth in the second half of the year, said Aidan Yao, emerging Asia economist at AXA Investment Managers.

With risks rising in some parts of the economy due to leveraged investments and over-borrowing, officials need to carefully balance support for growth with risk controls.

While China's first-half economic achievement was "hard won", more positive changes in the second half are expected, National Statistics Bureau spokesman Xing Zhihong told reporters. As China goes, so go emerging markets.

"The Fed's commitment to a gradual pace of interest rate hikes is maintaining supportive monetary conditions for emerging-market growth", said Adams, who previously worked for the Conference Board in Beijing.

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That follows Moody's decision in May to downgrade China for the first time in nearly three decades on concerns over its ballooning credit and slowing growth.

Nonetheless, according to the research house's own China Activity Proxy, which was created to give more reliable readings, Chinese GDP was in fact little changed in the second quarter, slowing from a 6.5% pace to 6.3%.

And growth in both imports and exports also came in above expectations.

That is mostly a effect of its efforts to reduce debt.

China Daily, the official English-language newspaper, said in a commentary Monday that fending off risks is one of the country's top priorities, with corporate debt running high, the property market being overheated and excess capacity in some sectors lingering.

Other than the unevenness in the economy, China's investment growth is also likely to moderate in the second half of this year.

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