China growth figures beat expectations

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BEIJING China's economy grew faster than expected in the second quarter as industrial output and consumption picked up and investment remained strong.

The economy grew 6.9 per cent in the second quarter from a year earlier, the same rate as the first quarter, the National Bureau of Statistics said yesterday.

Analysts polled by Reuters had expected the economy to expand 6.8 per cent.

Growth in China's economy this year has beaten expectations as exports recover and property construction remains strong, though many analysts expect it to lose steam later in the year as policy measures to rein in red-hot housing prices and a build-up in debt take a greater toll on growth.

The government is aiming for growth of around 6.5 per cent this year, lower than last year's 6.7 per cent, which was the weakest pace in 26 years.

China's factory output grew 7.6 per cent in June from a year earlier, the fastest pace in three months, while fixed-asset investment expanded 8.6 per cent in the first six months of the year, both beating forecasts.

Retail sales rose 11 per cent in June from a year earlier, the fastest pace since December 2015 and beating expectations for a 10.6 per cent rise.

An upturn in global demand for Chinese products could be a boon for the country's leaders as they seek to contain a dangerous build-up in debt that has ballooned to 277 per cent of gross domestic product.

China's steel output rose 5.7 per cent in June to a record 73.23 million tonnes.

Data last week showed China's exports and imports rose faster than expected in June from a year earlier, which could offset weakness in other parts of the economy in the second quarter.

China's economic growth is expected to cool to 6.6 per cent this year according to a Reuters poll of analysts, with the pace of expansion slowing steadily in the third and fourth quarter. - REUTERS