China’s quarterly economic growth steady at 6.7 percent

While China’s growth has fallen sharply from the double digit rates seen in the previous decade, it’s still the envy of advanced economies struggling with stagnant conditions.

As the world’s biggest trader in goods China is crucial to the global economy and its performance affects partners from Australia to Zambia.

Chinese leaders are trying to support growth to prevent widespread job losses and debt defaults, but they are also facing pressure to push through painful structural reforms to put the world’s second-largest economy on a more balanced and sustainable footing.

GDP expanded 6.9 per cent in 2015 – its weakest in a quarter of a century – and the government has targeted growth in a range of 6.5-7.0 per cent for this year.

“Growth is more likely to pick up over coming months than slow further, but a lasting turnaround is not on the cards”.

The M2, a broad measure of money supply that covers cash in circulation and all deposits, rose 11.8 percent year on year to 149.05 trillion yuan by the end of June, the People’s Bank of China said in a statement on its website. Beijing’s growing reliance on SOEs could also delay much-needed restructuring of the sector, where many firms are bloated, loss-making and inefficient.

A poll of 16 economists by The Wall Street Journal had predicted 6.6% growth in China’s gross domestic product in the April-June period.

Capital formation contributed 37 percent of growth, while net exports were a -10.4 percent drag on growth, the National Bureau of Statistics said.

June activity data released along with GDP was mixed, but weakening investment figures pointed to the risk of a loss of economic momentum later in the year. Industrial output and retail data for June beat estimates, investment slowed, and a separate report from the central bank showed the broadest measure of new lending beat all 29 analyst forecasts.

On the downside, fixed asset investment in urban areas rose 9%, below forecasts for a 9.4% gain.