China’s GDP Growth Flat At 7% During Q2

China’s GDP growth stayed flat at 7% year-on-year in the second quarter, helped by a notable pickup in the services sector, according to data released by the National Bureau of Statistics.

Property sales grew strongly in June and the second quarter, but a sizable inventory overhang in most cities led to the continued double-digit contraction of housing starts.

"The government is likely to retain its focus on enhancing the implementation of and funding for infrastructure investment, at the cost of rolling back some fiscal reforms and with the help of accommodative monetary and credit policies," writes a research report by UBS AG.

The bank cautions that growth prospects for the second half remain challenging as deceleration in property construction and its negative knock-on effect on the economy continues.

Investment Research Team
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