China: Growth holds Steady in Q2 - Wells Fargo

Chinese real GDP growth modestly topped expectations in Q2, amid an improving outlook for the global economy, noted analysts at Wells Fargo.

Key Quotes: 

“Data released today showed the Chinese economy growing 6.9 percent on a year-ago basis in Q2, topping expectations by 0.1 percentage point and matching the year-over-year pace from Q1. Over the past few quarters, China’s economy has very modestly accelerated; after
three consecutive quarters of 6.7 percent year-over-year growth to start 2016, the year-ago pace ticked up to 6.8 percent to cap the year and has climbed another tick thus far in 2017.”

“Economic growth in China has stabilized alongside the brightening outlook for global trade. Indeed, growth in Chinese export volumes has improved from the weak pace seen over the past couple years. Separate data released this morning showed Chinese industrial production topping expectations  in June on both a year-over-year and year-to-date basis. Investment spending growth, which has accounted for much of the slowdown in the Chinese economy over the past few years, has also leveled out as Chinese policymakers try to thread the needle in challenging areas such as housing; on a year-ago basis, fixed investment spending growth has held steady at 8.6 percent for the past three months.”

“Our currency strategy team sees a relatively steady renminbi in the near term, and moderate strength in the renminbi versus the U.S. dollar over the medium term amid a broadly softer outlook for the greenback. “