Mercado Released [20 July 2015]:Chinese Economic Growth
China scored better-than-expected growth in the second quarter of 2015. The largest Asian economy managed to achieve a growth rate of 7.0% on a year-on-year basis, beating the consensus view of 6.9%. On a quarterly basis, the economy achieved a 1.7% increase, compared to 1.4% which was achieved in the previous quarter. It seems that the stimulus measures that have been implemented by the Chinese central bank has had its desired effect. The world’s second largest economy has also managed to release some positive economic statistics. Industrial output climbed by 6.8%, whilst economists had expected an increase of 6.0%. Retail sales also saw an uptick, moving to 10.6%, beating economist’s expectation of 10.2%. Central Bank support has also led to an increase in bank lending during June. The China Beige Book Survey together with the Real Estate market is also pointing towards a recovery. This higher level of growth bodes well for the South African economy, as China accounts for SA’s largest export market. However the question remains of whether China will be able to maintain this level of growth, especially after some investors still remain worried given the 30% crash in the stock market last month.