China’s economy expands slightly faster than expected in the second quarter. But, as Ryan Brooks reports, there are signs that future indicators may not be so rosy.
Cracks show through upbeat China numbers
A better-than-expected checkup for China’s economy…
GDP from April to June clocking in unchanged in at 6.7 percent, just above what analysts predicted.
The reading suggests the world’s second-largest economy is holding steady…
…as investors fret over Brexit and a grinding slowdown.
But as Elias Glenn reports from Beijing, the champagne should probably be kept on ice.
SOUNDBITE (English) ELIAS GLENN, REUTERS ECONOMICS CORRESPONDENT, SAYING:
“Analysts are now looking for growth to slow down, primarily due to a slowdown in investment, particularly from private firms where investment growth has hit record lows. Lending in the first half hit a record high. The concern is that this kind of credit growth and monetary policy easing will have to continue in order to hit growth targets. But this will also exacerbate China’s debt issue, that is one of the main concerns going forward, that this debt will continue to pile up and the economy will continue to slow, with the government having to step in order to hit their targets.”
For now, Brexit doesn’t seem to have had a marked effect on China…
And Beijing is hoping is stays that way.
Chinese leaders are trying to prop up growth and save jobs while also dealing with with reforms that call for cutting back industry.
(SOUNDBITE) (English) CITI EUROPEAN ECONOMIST, CHRISTIAN SCHULZ, SAYING:
“Progress is being made but as we’ve seen over the last years, that is coming in waves and whenever the transition seems to hit the rocks, the government is intervening to try and smooth the way forward. Over the long run we do expect growth rates to continue declining and in the second half of the year might be particularly challenging.”
Stocks in Shanghai are still flailing after last year’s crash…
and the yuan currency is hovering near its lowest value in five and half years.