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China Maintains Steady Growth In Q2

China prefers a steady pace, at least in its officially reported data.China’s economy grew 6.9 per cent in the second quarter, matching the growth rate a quarter earlier, the statistics bureau said earlier on Monday.However, there are still some challenges for the Chinese economy in the near future. Accounting sleight of hand may play some role.”In general, we expect GDP growth to remain robust in the second half, but slower than the first half, due to the high base”, Citi said on Monday.The data helped push regional stocks, in the form of the MSCI Asia ex-Japan index, past a two-year high in overnight trading while the yuan gained for a sixth consecutive session against the US dollar after the People’s Bank of China raised the midpoint of the currency to 6.7562, its highest level in more than 8 months.A key contributor to the growth surprise was much stronger-than-expected industrial production, at 7.6%, up from 6.5% y/y the previous month.Meanwhile investors rushed to drain their capital from the highly-speculative startup sector “after officials reiterated tightening financial regulations” at a national financial conference over the weekend, said Deng Haiqing, chief economist at JZ Securities.The Chinese economy grew faster than expected in the second quarter, boosted by stronger industrial output and personal consumption as well as steady investments.Total social financing plus bonds, the broadest measure of credit, expanded 14.7 percent in June compared with the same month a year earlier.The iShares China Large-Cap exchange-traded fund (FXI) is down 0.5%, and the Deutsche x-trackers harvest CSI 300 China A-Shares ETF (ASHR) is down 1.7%.China’s ruling Communist Party has focused on keeping the economy stable ahead of a reshuffle of its top leadership in the fall, when President Xi Jinping will start his second term.China has many tools for managing a debt buildup. “Overall, the economy continued to show steady progress in the first half”, the bureau’s statement said.Export data last week showed steel products shipments fell last month, while aluminum sales overseas were steady.Steel demand has been vigorous, especially in residential construction.