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| China's economic growth picks up | China's economic growth picks up |
| (about 7 hours later) | |
| China's economy picked up speed in the April-to-June quarter, a sign that the government's stimulus moves have started to have an impact. | China's economy picked up speed in the April-to-June quarter, a sign that the government's stimulus moves have started to have an impact. |
| The world's second-largest economy expanded 7.5%, from a year ago, up from 7.4% growth in the previous quarter. | The world's second-largest economy expanded 7.5%, from a year ago, up from 7.4% growth in the previous quarter. |
| Other data released on Wednesday showed that retail sales and factory output also rose in June. | Other data released on Wednesday showed that retail sales and factory output also rose in June. |
| The data comes as China has introduced a series of measures in recent months to help boost its growth. | The data comes as China has introduced a series of measures in recent months to help boost its growth. |
| "The result is very good and shows the economy has recovered very well in the second quarter," said Dariusz Kowalczyk, a senior economist with Credit Agricole in Hong Kong. | "The result is very good and shows the economy has recovered very well in the second quarter," said Dariusz Kowalczyk, a senior economist with Credit Agricole in Hong Kong. |
| Growth boost | Growth boost |
| After years of robust expansion, China's economic growth rate has slowed in recent times, in part due to a decline in demand for its exports from key markets. | After years of robust expansion, China's economic growth rate has slowed in recent times, in part due to a decline in demand for its exports from key markets. |
| Prompted by the slowdown, China has been trying to boost domestic consumption to sustain its expansion and also to rebalance its growth model. | Prompted by the slowdown, China has been trying to boost domestic consumption to sustain its expansion and also to rebalance its growth model. |
| Last month, China's central bank said it would cut the reserve requirement ratio (RRR) - the amount of cash banks needs to keep in reserve - for banks engaged in lending to agriculture-related businesses and small companies to make more cash available for lending. | Last month, China's central bank said it would cut the reserve requirement ratio (RRR) - the amount of cash banks needs to keep in reserve - for banks engaged in lending to agriculture-related businesses and small companies to make more cash available for lending. |
| It said it would also encourage banks to lend more to exporters to boost shipments. | It said it would also encourage banks to lend more to exporters to boost shipments. |
| In April, the government said it would cut taxes on small firms and speed up the construction of railway lines across the country. | In April, the government said it would cut taxes on small firms and speed up the construction of railway lines across the country. |
| The government has also announced plans to build railways, roads and airports along the Yangtze River - which connects China's less developed inland provinces to Shanghai. | The government has also announced plans to build railways, roads and airports along the Yangtze River - which connects China's less developed inland provinces to Shanghai. |
| 'Targeted stimulus' | 'Targeted stimulus' |
| Data released over the past few weeks has indicated the moves have started to have a positive effect on growth. | |
| Earlier this month, China reported that its manufacturing activity grew at its fastest pace for six months in June. | |
| On Wednesday, it said that factory output rose 9.2% in June, from a year earlier, while fixed asset investment jumped 17.3% in the first six months of the year. | On Wednesday, it said that factory output rose 9.2% in June, from a year earlier, while fixed asset investment jumped 17.3% in the first six months of the year. |
| Meanwhile, retail sales in June were 12.4% higher than a year ago, indicating that domestic consumption was picking up. | Meanwhile, retail sales in June were 12.4% higher than a year ago, indicating that domestic consumption was picking up. |
| Mr Kowalczyk said the "noticeable improvement" in industrial production and fixed asset investment was due to "the targeted stimulus measures undertaken by the Chinese authorities". | Mr Kowalczyk said the "noticeable improvement" in industrial production and fixed asset investment was due to "the targeted stimulus measures undertaken by the Chinese authorities". |
| Stimulus dependent? | Stimulus dependent? |
| However, Chang Jian, an analyst with Barclays, suggested that while the latest growth numbers were in line with expectations, "the underlying momentum and recovery is still in a fragile state". | However, Chang Jian, an analyst with Barclays, suggested that while the latest growth numbers were in line with expectations, "the underlying momentum and recovery is still in a fragile state". |
| She cited the recent slowdown in China's property market - a key contributor to its growth - as an area of concern. | She cited the recent slowdown in China's property market - a key contributor to its growth - as an area of concern. |
| "The biggest risk for the second half is property correction and related financial risks," she said. | |
| Ms Chang also added that "the recovery is quite dependent on government support". | Ms Chang also added that "the recovery is quite dependent on government support". |
| "So, I think the government can choose either to tolerate lower growth, or to achieve the growth target they just have to do more stimulus." | "So, I think the government can choose either to tolerate lower growth, or to achieve the growth target they just have to do more stimulus." |
| She said she expects the policymakers to cut interest rates in the coming months and take steps to "boost infrastructure spending and to support consumption growth". | She said she expects the policymakers to cut interest rates in the coming months and take steps to "boost infrastructure spending and to support consumption growth". |
| China has set a growth target of 7.5% for 2014. | China has set a growth target of 7.5% for 2014. |