China’s economy grew at its slowest quarterly pace in seven years, touching down at levels last seen during the dark days of the global financial crisis in early 2009.
The world’s second-largest economy grew by 6.7% in the three months to the end of June, compared with the same period a year earlier, according to China’s National Bureau of Statistics. That is a hair better than the 6.6% forecast in a CNNMoney survey of economists, and matches the rate of growth in the first quarter.
“I think it is, in fact, slightly positive,” said Edmund Goh of Aberdeen Asset Management. “I think a lot of people are really expecting slower growth, but the fact that it is slightly above what the market was pricing in, is a positive sign.”
Stock markets in China appeared unruffled and were little changed in Friday trading.
Investors were left reeling by last year’s turmoil on Chinese markets, and have been preparing for the worst. But it appears things aren’t quite as bad as expected.
Growth in the most recent quarter was buoyed by more state-backed investment, according to Capital Economics. Retail sales also picked up, evidence perhaps of the government’s attempts to transition the economy away from manufacturing and exports to services and consumption.
Still, the glimmer of good news may not last for long. For 2016 as a whole, economists surveyed by CNNMoney expect GDP growth to fall to 6.5%, the bottom end of the government’s own target of between 6.5% and 7%. Looking ahead, economic expansion in 2017 is expected to slow further to 6.3%.
china slow economy
“Growth is more likely to pick up over coming months than slow further, but a lasting turnaround is not on the cards,” said Daniel Martin and Mark Williams at Capital Economics.
China’s pace of growth makes it one of the world’s stronger performers, but it remains a far cry from the heady days of 10% growth or more, which is why China has many experts and investors on edge.