China's GDP grows 6.9% in Q2 as industrial output, consumption pick up

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"The national economy performed within an appropriate range with more visible good momentum and achieved steady growth", the National Bureau of Statistics, which released the data, said.

The economy remains on track to meet the government's growth target of about 6.5% this year.

Urban investment in June remained steady with an 8.6 per cent annual growth rate.

Data from NBS showed that industrial output climbed 7.6% annually, faster then the 6.5% increase logged in the prior period. The index was unchanged at 95.17 after sliding almost 1% last week.

"However, we must be aware that there are still many unstable and uncertain factors overseas and long-term structural contradictions remain prominent at home", Xing told reporters.

This was up from the 6 percent increase in the same period of previous year, according to the National Bureau of Statistics.

China posts 6.9 percent GDP growth in H1
It also said that leverage of enterprises "was brought down". "Therefore, the risks for banks are also very high". In the first six months, crude oil output dropped 5.1 percent year on year to 96.45 million tonnes.

Likewise, retail sales growth accelerated to 11% in June from 10.7% in May, while growth was expected to ease to 10.6%.

New construction starts measured by floor area were up 10.6 percent in the first half of the year, compared with a 9.5 percent rise in the first five January-May, the National Bureau of Statistics (NBS) said.

The services sector led the growth with an increase of 7.7 percent, while the manufacturing and the agriculture added 6.4 percent and 3.5 percent separately.

Debt-fuelled investment in infrastructure and real estate has underpinned China's growth for years but warnings of a potential financial crisis have spurred Beijing to clamp down.

In terms of de-stocking in the property market, the floor space of unsold homes were down 9.6 per cent at the end of June, state-run Xinhua news agency reported.

As the central government becomes extremely serious in curbing SOEs' financial leverage and expresses zero tolerance of local governments' inability to curb debt growth, more corporate defaults are expected as local officials will likely shy away from some refinancing activities. The two countries will also look to open China's market to USA credit ratings firms and credit card payment services firms.