China Q2 GDP Growth Slows to 6.7%


The Chinese economy advanced 6.7 percent year-on-year in the second quarter of 2018, easing from a 6.8 percent growth in the previous preiod and matching market consensus. It was the weakest pace of expansion since the third quarter of 2016 amid intensifying tariff battle with the US and efforts to deleverage debt and financial risks.

For the first half of the year, China's economy expanded 6.8 percent compared to the same period 2017 amid efforts to deleverage debt and contain financial risks. The value added of the primary industry was up by 3.2 percent; the secondary industry by 6.1 percent; and the tertiary industry by 7.6 percent.

Industrial production rose 6 percent year-on-year in June, easing from a 6.8 percent increase in May and missing market consensus of 6.5 percent. Output growth slowed for all sectors: manufacturing (6 percent vs 6.6 percent in May); electricity, gas and water (9.2 percent vs 12.2 percent); and mining (2.7 percent vs 3 percent). Across industries, output rose at a softer pace for: chemicals (2.9 percent vs 4.3 percent); transport equipment (0.7 percent vs 2.5 percent); machinery (3.8 percent vs 6.4 percent); communication (10.9 percent vs 13.5 percent); and power equipment (9.3 percent vs 12.4 percent). Also, production of textiles continued to contract (-0.1 percent vs -1.5 percent), while output growth picked up for ferrous metals (7.8 percent vs 7.4 percent), general equipment (6.8 percent vs 6.6 percent), and non-metal minerals (3.7 percent vs 2.6 percent). In the first half of the year, industrial production grew by 6.7 percent.

Retail sales increased 9 percent from a year earlier in June 2018, following a 8.5 percent rise in the previous month and beating market expectations of 8.8 percent. Sales growth accelerated for: garments (10 percent vs 6.6 percent in May); cosmetics (11.5 percent vs 10.3 percent); jewelry (7.9 percent vs 6.7 percent); personal care (15.8 percent vs 10.3 percent); home appliances (14.3 percent vs 7.6 percent); furniture (15 percent vs 8.6 percent); telecoms (16.1 percent vs 12.2 percent); oil, oil products (16.5 percent vs 14 percent); and building materials (7.2 percent vs 6.5 percent). Meantime, sales of office supplies rose at a softer pace (3.5 percent vs 8.1 percent), and those of automobiles declined further (-7 percent vs -1 percent). Considering the first half of the year, retail trade grew 9.4 percent. Retail sales in rural areas increased 10.5 percent, continuing to outpace the growth in urban regions, where sales rose 9.2 percent.

Figures released earlier showed exports increased 11.3 percent year-on-year to USD 216.7 billion in June, while imports grew 14.1 percent to USD 175.1 billion. For the first half of 2018, outbound shipments rose 12.4 percent and purchases went up 19.7 percent. The six-month trade surplus with the US jumped 13.8 percent to USD 133.76 billion, as exports increased by 13.6 percent and imports by 11.8 percent.

China's fixed-asset investment increased by 6 percent year-on-year to CNY 29.73 trillion in the first half of the year, compared to a 6.1 percent growth in the January to May period and in line with market expectations. It was the smallest gain in fixed-asset investment since the series began in 2004, mainly due to a slowdown in public investment (3 percent vs 4.1 percent in January-May). At the same time, private investment grew by 8.4 percent (vs 8.1 percent). In breakdown, FAI in agriculture was up 13.5 percent (vs 15.2 percent), followed by 6.8 percent for the service sector (vs 7.7 percent), and 3.8 percent for industry (vs 2.5 percent). In addition, investment in electricity, heat, gas and water production continued to fall (-10.3 percent vs -10.8 percent), as well as in railway transport (-10.3 percent vs -11.4 percent).

For 2018, the Chinese government targets growth at around 6.5 percent, the same as in 2017.


China Q2 GDP Growth Slows to 6.7%


National Bureau of Statistics | Rida | rida@tradingeconomics.com
7/16/2018 8:45:21 AM