China’s economic growth edged up in the latest quarter and more than 7 million new jobs were created in the first half of the year, easing pressure on the nation’s leaders as they try to prevent a precipitous slowdown in the world’s second-largest economy.
Economic growth expanded to 7.5 percent over a year earlier in the three months ended June 30 from the previous quarter’s 7.4 percent, data showed yesterday.
The first quarter matched a downturn in late 2012 for the slowest rate of expansion since the 2008 global crisis.
Photo: Reuters
“A lot of the June data looks quite strong, stronger than expected,” Capital Economics economist Julian Evans-Pritchard said. “I think it should vindicate policymakers’ approach to targeted measures to stimulate growth.”
China’s steady decline from the explosive double-digit growth rates of the past decade has had global repercussions, cutting demand for iron ore, copper and other commodities that helped to fuel its expansion.
The latest growth was in line with the Chinese Communist Party’s 7.5 percent target for the year. Analysts say Chinese leaders are willing to accept even slower growth as long as the economy generates enough new jobs to prevent unrest.
A relatively healthy 7.4 million urban jobs were created in the first half, government spokesman Sheng Laiyun (盛來運) said.
He said just over 3 million rural migrants moved to cities during that period to work, a sign of demand for labor.
“In the first half of the year, economic growth was stable. Employment was stable,” Sheng said at a news conference.
Consumer spending rose 12.1 percent from a year earlier in the second quarter, though that was down 0.3 percentage points from the previous quarter, Sheng said.
He said investment in factories, real estate and other fixed assets rose 17.3 percent.
Despite the latest uptick in growth, analysts expect China’s expansion to cool further over the coming year.
The IMF expects growth to slow to 7.3 percent next year and to below 7 percent in 2016.
Some analysts expect an even deeper decline, with growth as low as 6.8 percent this year. That would be stronger than the US, Japan or Europe, but China’s weakest annual growth in two decades.
The latest data show the economy’s reliance on higher government spending to offset weakness in real-estate investment, a key growth driver, Evans-Pritchard said.
“We don’t think this is a sign that growth is stabilizing,” he said. “The stabilization has been largely a result of government stimulus measures.”
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