China’s GDP Growth Was 6.7% in 2Q16: Is Its Economy Recovering?
China’s GDP in 2Q16
According to the report provided by the National Bureau of Statistics of China, China’s GDP grew by 6.7% in 2Q16.
The country’s economic growth remained the same in 1Q16. It beat market expectations of 6.6% growth. However, it was one of the slowest quarterly growths in seven years.
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Economic growth improved in the second quarter as industrial output and retail sales showed strong improvements while fixed-asset investments slowed in June. The rise in retail sales is an important indicator for the economy.
As we discussed above, consumption patterns are changing in China’s economy. Chinese consumers (MCHI) (ASHR) are becoming more selective toward the products and services that they use. This indicates that the economic trend is changing.
Is the economy recovering from the slowdown?
The People’s Bank of China (or PBoC) recently took steps to stimulate the Chinese economy (FXI) (YINN). The central bank is also looking to stabilize the Chinese yuan and minimize the volatility in the currency. Now government spending needs to improve in the economy to support this transitional phase.
However, the 2Q16 GDP figure wasn’t as bad as it was expected to be. Improvements in the above parameters show that the economy may accelerate in the near future. China has provided a strong performance across the global economy (VT) (VEU) in recent years. So, improvements in its economy will also provide strong confidence in the world economy.