China’s economy slows as people spend less

June data also show rise in factory output

- JOE CASH ELLEN ZHANG KEVIN YAO

China's economy slowed less than expected in the second quarter in a show of resilience against US tariffs, though analysts warn that weak demand at home and rising global trade risks will ramp up pressure on Beijing to roll out more stimulus.

The world’s No. 2 economy has so far avoided a sharp slowdown in part due to policy support and as factories took advantage of a US-China trade truce to front-load shipments, but investors are bracing for a weaker second half as exports lose momentum, prices continue to fall, and consumer confidence remains low.

Policymakers face a daunting task in achieving the annual growth target of around 5% — a goal many analysts view as ambitious given entrenched deflation and weak demand at home.

Data yesterday showed China's gross domestic product (GDP) grew 5.2% in the April-June quarter from a year earlier, slowing from 5.4% in the first quarter, but just ahead of analysts’ expectations in a Reuters poll for a rise of 5.1%.

“China achieved growth above the official target of 5% in Q2 partly because of front loading of exports,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.

“The above target growth in Q1 and Q2 gives the government room to tolerate some slowdown in the second half of the year.”

Ona quarterly basis, GDP grew 1.1% in April-June, the National Bureau of Statistics data showed, compared with a forecast 0.9% increase anda 1.2% gain in the previous quarter.