The Chinese economy has slowed less than expected in the second quarter, in a demonstration of resilience against US rates, although analysts warn that the weak demand in the country and the growing risks of global trade will increase the pressure on Beijing to implement multiple stimuli.
To date, the second largest economy in the world has prevented a strong slowdown in part due to the support measures and because the factories have exploited the commercial respite between the United States and China to anticipate shipments, but investors are preparing for a second weaker semester, since exports have lost strength, the prices continue to fall and the trust of consumers remains low.
The authorities face a difficult task to achieve the annual growth objective of about 5% – a goal that many analysts consider ambitious, given the deflation of the root and the weakness of the internal demand.
The data released Tuesday showed that China’s gross domestic product (GDP) grew by 5.2% in the quarter between April and June compared to the previous year, slowing down over 5.4% of the first quarter, but just above the expectations of analysts in a reuters survey by 5.1%.
“Despite a strong first half, the perspectives should deteriorate in the second half of the semester, since the anticipation of exports decreases and the impact of the US rates becomes more visible,” said Wei Yao, economist of Société Générale.
“The renewed weakness of homes of homes and the growing impact of the subsidies also put doubts about the sustainability of the recovery of consumption”.
In the quarterly comparison, the GDP grew by 1.1% in the second quarter, according to the data of the national statistical office, compared to an increase of 0.9% and a 1.2% gain in the previous quarter.
Investors are aware of the signs of new stimuli at the next Politburo meeting scheduled for the end of July, which will probably define economic policy for the rest of the year.
Beijing has increased the expense for infrastructure and subsidies for consumers, together with monetary loose. In May, the Central Bank cut interest rates and injected liquidity as part of the efforts to cushion the economy of the impact of the rates of the President of the United States Donald Trump.
Some analysts believe that the government may increase the deficit expenditure if growth slows down.
Separate data on the June activity, also released Tuesday, have highlighted the pressure on consumers. Although industrial production has increased by 6.8% in June compared to the previous year, the fastest pace since March, the growth in sales has slowed down to 4.8% compared to 6.4% in May, reaching the lowest level from January -Femica.
China’s observers and analysts say that the stimulus alone may not be sufficient to combat the rooted explazed pressures, with the prices of producers who decrease in June at its fastest rhythm in almost two years.
Zichun Huang, China economist in capital economics, said that GDP data “probably still exaggerate the strength of growth”.
Source: Terra
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