Growth slows but stays stable

China’s economic growth has slowed but remains generally stable, according to the National Bureau of Statistics, with gross domestic product expanding 6.3 percent year on year in the first half to about 45.09 trillion yuan (US$6.6 trillion).

Economic growth in the first quarter was 6.4 percent, while that in the second quarter cooled to 6.2 percent year on year.

However, the 6.3 percent growth in the first six months was in line with the government's 2019 target of 6 to 6.5 percent, the bureau said.

Despite a complex internal and external situation, economic growth remained generally stable and within a reasonable range, bureau spokesman Mao Shengyong said.

The industrial output of major enterprises rose 6 percent in the first six months from a year earlier, but was 0.5 percentage points slower than growth in the first quarter.

The mining industry posted a 3.5 percent year-on-year growth in the value-added output, manufacturing rose 6.4 percent, and the electricity, heat, gas and water production, and supply industry advanced by 7.3 percent.

Strategic emerging industries posted a year-on-year increase of 7.7 percent, 1.7 percentage points faster than the growth pace of overall industrial production. Output of the high-technology industry grew 9 percent, 3 percentage points faster than overall industrial output growth and accounted for 13.8 percent of that, indicating optimization of the industrial structure, the bureau said.

The service sector expanded 7 percent year on year in the first half, outpacing a 3 percent increase in primary industry and 5.8 percent in secondary industry, according to the bureau.

The output of the service sector accounted for 54.9 percent of total GDP in the first half, 0.5 percentage points higher than the same period of last year.

Fixed-asset investment grew 5.8 percent year on year in the first half, lower than 6.3 percent in the first quarter but 0.2 percentage points faster than the January-May period.

Private investment picked up in the first half, growing 5.7 percent year on year. Meanwhile, fixed-asset investment in high-tech manufacturing displayed particularly strong momentum by growing 10.4 percent, 4.6 percentage points faster than the overall FAI.

Consumption continued to play a major role in driving economic growth. “The contribution from the consumption sector to the overall economic growth reached 60.1 percent in January-June, indicating the continuous consumption upgrade,” Mao said.

Retail sales rose 8.4 percent in the first half, accelerating from 8.3 percent in the first quarter.

The June rise in retail sales growth was driven mainly by surging auto sales, said Lu Ting, chief China economist of Nomura. Headline retail sales growth in nominal terms surged to 9.8 percent year on year in June from 8.6 percent in May, the highest monthly print since April 2018.

Growth in auto sales surged to 17.2 percent year on year in June from 2.1 percent in May, which is consistent with the data reported by the China Passenger Car Association showing growth of passenger car sales (by volume) jumped to 4.9 percent in June from the 12.5 percent drop in May, according to Nomura.

China’s export growth in US dollar terms fell to post a 1.3 percent year-on-year drop in June from the 1.1 percent rise in May, while import growth remained low at a negative 7.3 percent in June. 

In the first half of the year, 7.37 million new urban jobs were created, achieving 67 percent of the annual target for the year. The urban surveyed unemployment rate in 31 major cities was 5 percent in June, unchanged from a month earlier.