Key points
- Q2 GDP growth above 5.1pc forecast
- June data show stronger factory output
- US tariffs pose risks
ISLAMABAD: China’s economy expanded more than five per cent in the second quarter of the year, official data showed on Tuesday, after analysts predicted strong exports would provide crucial support despite trade war pressures.
The country’s leadership is fighting a multi-front battle to sustain growth, a challenge made more difficult by Donald Trump’s tariff campaign.
The US president has imposed tariffs on China and most other major trading partners since returning to office in January, threatening Beijing’s exports just as it becomes more reliant on them to stimulate economic activity.
The two superpowers have sought to de-escalate their trade spat after reaching a framework for a deal at talks in London last month.
Trump upped the ante on Monday, warning Russia’s trading partners — which include China — that he will impose “very severe” tariffs reaching 100 per cent if Moscow fails to end its war on Ukraine within 50 days.
Western nations have repeatedly urged China — a key commercial ally of Russia — to wield its influence and get Vladimir Putin to stop his three-year-old war with Ukraine.
Matching prediction
Official data on Tuesday showed the Chinese economy grew 5.2 per cent in April-June, matching a prediction by an AFP survey of analysts.
But retail sales rose 4.8 per cent on-year, below the 5.3 per cent forecast in a Bloomberg survey of economists, suggesting efforts to kickstart consumption have fallen flat.
However, factory output gained 6.8 per cent, higher than the 5.6 per cent estimate.
On a quarterly basis, GDP grew 1.1 per cent in April-June, the National Bureau of Statistics data showed, compared with a forecast 0.9 per cent increase and a 1.2 per cent gain in the previous quarter.
“The national economy withstood pressure and made steady improvement despite challenges,” National Bureau of Statistics (NBS) deputy director Sheng Laiyun told a news conference.
“Production and demand grew steadily, employment was generally stable, household income continued to increase, new growth drivers witnessed robust development, and high-quality development made new strides,” he said.
Optimism
Data from the General Administration of Customs on Monday showed exports rose much more than expected in June, helped by the US-China trade truce.
Imports also rose 1.1 per cent, higher than the 0.3 per cent gain predicted and marking the first growth this year.
Customs official Wang Lingjun told a news conference on Monday that Beijing hoped “the US will continue to work together with China towards the same direction”, state broadcaster CCTV reported.
The tariff truce was “hard won”, Wang said.
“There is no way out through blackmail and coercion. Dialogue and cooperation are the right path,” he said.
According to Reuters, China’s blue-chip CSI300 Index reversed course to trade flat, while Hong Kong’s benchmark Hang Seng cut gains after the data came in.
The CSI 300 index was down 0.1 per cent, while the Hang Seng was up 0.7 per cent.
