Rise in Lending, Consumer Spending Boost China Economy in Q2

China’s economy has stabilized in the second quarter, with gross domestic product rising 6.7 percent during the period from a year earlier. This in line with the government’s growth target of at least 6.5 percent for the full year, reports Bloomberg.

The economy was boosted by a rise in lending and consumer spending. Policy makers have kept benchmark interest rates at a record low of 4.35% since October as they balance their growth objective with efforts to curb debt risks and reduce excess capacity.

While policy makers have allowed the yuan to slide to levels near the weakest in almost six years, the stock market has been generally steady this year after plunging in 2015.

The central bank has also cut its reserve-requirement ratio for major banks, with the latest reduction in February to 17 percent.

Industrial production climbed 6.2 percent in June from a year earlier, compared to 6 percent in May and economists’ estimates for 5.9 percent.

Retail sales rose 10.6 percent, compared to the median estimate of 9.9 percent, while fixed-asset investment slowed to 9 percent in the January-June period versus economists’ expectation for 9.4 percent. Aggregate financing was 1.63 trillion yuan ($244 billion) in June, compared with an estimate for 1.1 trillion yuan in a Bloomberg survey.

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