China’s economy expanded at a slower pace in the second quarter as Beijing’s crackdown on debt risks crimped activity, while June factory output growth wea
BEIJING – China’s economy expanded at a slower pace in the second quarter as Beijing’s crackdown on debt risks crimped activity, while June factory output growth weakened to a two-year low in a worrying sign that comes amid a heated trade war with the United States that threatens to knock exports.
The more timely activity indicators for last month back market views that growth is cooling, with some analysts calling for the government to take stronger measures to support the economy
“They need to slow financial deleveraging slightly and to turn their focus more on growth-supportive measures, for example increasing liquidity through (bank reserve requirement) cuts,” said Iris Pang, Greater China economist at ING in Hong Kong.
“If the situation gets worse a lot faster than what we expect, I do think Chinese authorities need to beef up supportive measures, both fiscal and monetary.”
The economy grew 6.7 percent in the second quarter from a year earlier, in line with expectations and slightly lower from the first quarter, the National Bureau of Statistics said Monday.
First-half fixed asset investment growth was a record low, while industrial output for June matched the slowest growth rate in over two years at 6 percent and missed forecasts centered on 6.5 percent expansion.
Analysts polled by Reuters had expected the economy to expand 6.7 percent in the April-June quarter.
On a quarterly basis, growth picked up 1.8 percent from 1.4 percent in the first quarter, beating expectations of 1.6 percent growth.
The second-quarter data weighed on markets around Asia, adding to investor concerns about the impact of the Sino-U.
