China: Near-term economic stability – Westpac

In Q2, China’s annual GDP growth was sustained at 6.9%yr, a third consecutive upside surprise which point towards the economic stability, according to analysts at Westpac.

Key Quotes

“Consumption remains the primary support for growth in year-to-date terms, 4.4ppts. However, investment’s contribution jumped to 2.3ppts in Q2 as funds raised in Q1 were put to work.”

“Nominal growth in the secondary sector remains strong, circa 12.7%yr, with manufacturing experiencing improved demand. Investment by manufacturers has firmed, but the public sector remains the primary support for investment overall.”

“In the services sector, growth has also remained robust, 11.4%yr. For the most part, this momentum should be sustained. However, the PMIs have recently highlighted that headwinds for the sector could grow given employment growth has slowed.”