Test for China as its GDP slows to 7.5pc
CHINA'S GDP growth slowed in the second quarter to 7.5pc year on year as weak overseas demand weighed on output and investment, lining up a test of Beijing's resolve to revamp the world's second-biggest economy in the face of deteriorating data.
Other figures showed industrial output in June rising slightly less than forecast compared with a year earlier, but retail sales increasing more than had been expected.
The latest year-on-year economic growth reading compared with the median forecast in a Reuters poll of 7.5pc and showed the pace of economic activity easing from 7.7pc annual growth in January-March.
"These figures are not surprising, adding to signs of downward pressure on China's economy," said Zhou Hao, an economist at ANZ Bank in Shanghai.
The Australian dollar, which is highly sensitive to Chinese demand for Australian raw materials, rose on relief that the GDP numbers were not weaker, after last week's report of a surprise fall in exports in June from a year earlier.
China's statistics bureau said the economy's performance in the first half of the year was stable overall and that indicators were within a reasonable range.
New Premier Li Keqiang has been prominent in pushing for economic reform over fast-line growth, suggesting the government is in no rush to offer fresh stimulus to revive an economy in a protracted slowdown. With the latest GDP data, China's growth has slowed down in nine of the past 10 quarters.
The government's official growth target for 2013 is 7.5pc, impressive by world standards but it would be the slowest pace in 23 years for China.
The latest data showed the economy grew 7.6pc in the first half of the year from a year earlier, just ahead of the full-year target.
Analysts have cut their forecasts for 2013 full-year growth in recent weeks following a run of weak data and government comments on slowing growth. Ahead of yesterday's economic figures, they were mostly forecasting 2013 growth between 7 and 7.5pc.
Last week, customs data showed China's exports fell 3.1pc in June against forecasts for a rise of 4pc, while imports dipped 0.7pc versus an expected 8.0pc rise. The customs administration added that the outlook for July to September was "grim". (Reuters)