Investing.com – China’s economy expanded by 6.7% in the second quarter, its slowest pace since 2016, although the growth is still above the government’s target of “about 6.5%” growth for the year.
Beijing’s trade war with the US were cited as headwind for domestic demand. Gross domestic product grew at 6.8% in the previous three quarters.
While the official GDP readings were largely in line with market expectations, the country’s industrial output grew 6% year-on-year in June, which was slower than the expected 6.5%. The data showed slowing momentum and prompted analyst to call for stronger government measures to support growth.
Retail sales on the other hand rose 9% year-on-year in June, beating the general consensus of a 8.8% increase, although its impact on stock markets seemed to be limited.
"China's economy can be knocked, and when it comes to trade, it influences a lot of sectors, a lot of jobs associated with it. Net export sheds are a small percent of GDP but your brain is only 3 percent of your body mass [and] losing 3 percent can be very important to you," said Fraser Howie, an independent analyst in an interview with CNBC.
The risks from the U.S.-China trade war is expected to be a drag on overall growth in the next few years, and Beijing is likely to continue easing monetary policy going forward, analysts said.
On the other hand, spokesman from the National Bureau of Statistics Mao Shengyong said following the release of the GDP data that trade disputes with the U.S. is not likely to affect China's consumer prices, and consumer spending is expected to remain steady in the second half of the year.
There will be no change to the steady, improving trend in China's economy, Mao added.