HONG KONG — Chinese gross domestic product grew 6.9 percent in the second quarter, the National Bureau of Statistics (NBS) said Monday. This was equivalent to the rate it grew in the first three months of the year, and slightly above analysts’ forecast for a 6.8 percent increase.
June retail sales and factory output both surpassed expectations, growing 11 percent and 7.6 percent, respectively.
“Overall, the economy continued to show steady progress in the first half…but international instability and uncertainties are still relatively large, and the domestic long-term buildup of structural imbalances remain,” the NBS said.
The data puts the economy ahead of the growth target set by Beijing in March, when the government said it was aiming for growth of around 6.5 percent this year. In 2016, the economy expanded by 6.7 percent.
“It was the monthly data which impressed, with retail sales at 11 percent year-on-year posting its strongest growth since December 2015, and all the more robust given that this is a value not a volume measure, and CPI inflation has been very subdued in recent months,” said Marc Ostwald of ADM Investor Services.
Despite the better than expected data, market reaction was mixed in the region. Hong Kong’s Hang Seng Index rose just 0.3 percent, while the Shenzhen Composite Index fell 3.6 percent and the Shanghai Composite Index was down 1.4 percent.
A government financial policy meeting over the weekend indicating tighter regulation seems to have contributed to the sell-off. President Xi Jinping spoke at the closed-door meeting, where the government said it would establish a new committee to oversee the financial sector.