Chinese Economy Expands 6.7 Percent in 2Q

The world’s second largest economy rebounded in the second quarter of the year as increase in consumer spending fuel growth.

The economy rose 6.7 percent in the second quarter, exceeding analysts’ 6.6 percent estimated prior to the release. The result is in line with China’s growth projection of 6.5 percent for 2016.

Industrial production also climbed 6.2 percent in June from 12 months ago, compared to 6 percent recorded in May. While retail sales reportedly rose 10.6 percent.

Although fixed-asset investment slowed to 9 percent in the first half of the year when compared to economists’ expectation of 9.4 percent, but financing rose to 1.63  trillion Yuan ($244 billion).

Early this year, the People’s Bank of China expands monetary policy to increase its credit facility in order to enhance lending by commercial banks, this has helped prop up growth even as investors doubt its sustainability. The central bank also left interest rates at record lows to lower debt risks and reduce excess capacity.

“While China’s economy continues to face daunting challenges in the transition away from export- and investment-led growth, the doomsday predictions for the Chinese economy look like stopped clocks,” said Bill Adams, a senior international economist at PNC Financial Services Group in Pittsburgh.

The onshore yuan climbed 0.06 percent following the report to 6.6839 per dollar as of 9:50 a.m. in Shanghai.