Growth in China, Government Stimulus Drives the Economy



GDP increases by 6.7% in China

China’s (FXI) (MCHI) (ASHR) GDP grew by 6.7% in the second quarter on an annual basis—in line with the previous quarter’s growth and slightly above expectations. On a quarterly basis, China’s GDP increased by 1.8%—above estimated forecasts of 1.6% and the previous quarter’s growth of 1.2%. The PBOC (People’s Bank of China) expected economic growth of 6.5%–7%. The increased GDP in the emerging market economy (EEM) (VWO) was primarily driven by stimulus from the government. China’s economy is gradually moving towards being more consumer-based—compared to the earlier manufacturing-based setup.

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Industrial production rose

China’s industrial production increased by 6.2% on an annual basis in June—higher than 6.0% growth in the previous month and expectations of a 5.9% increase. The increase was led by growth in manufacturing output and the utility segment. It was partially offset by a decline in the mining sector. Fixed-asset investment grew by 9.0% on an annual basis in June—compared to a 9.6% rise in the previous month as investments in private firms slowed.

Retail sales increase to six-month high levels

Retail sales in China rose at a higher pace of 10.6% on an annual basis—above a 10.0% rise in the previous month and at the fastest pace since December 2015. It also exceeded the estimated forecast of 10.0%. The rise in retail sales was primarily driven by building materials, furniture, home appliances, telecom, and personal care.


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