In the second quarter of 2013, the Chinese economy continued to maintain its growth, but at a slower rate. China’s second quarter GDP was 7.5 percent, in line with market expectations,1 while the GDP growth rate for the first half of 2013 was 7.6 percent. Industrial output increased 9.3 percent year-on-year in the first half of 2013, while the growth of fixed-asset investment, a measure of government and private spending on infrastructure, grew by 20.1 percent through the first half of 2013. Other key takeaways from China’s second quarter macroeconomic situation include:
- China faces diminishing marginal returns from past stimulus packages, higher rates of total social financing, as well as an increased exposure to credit risk.
- June consumption rose, as total retail sales of consumer goods increased 13.3 percent year-on-year, outpacing May and April by 0.4 and 0.5 percent respectively.
- China’s manufacturing PMI and the HSBC PMI both declined, signifying a slight deterioration of the business environment.
- The M2 money supply grew by 14 percent in June, slightly slower than the 15.8 percent growth in May and 16.1 percent increase in April.
- Renminbi-denominated transactions continue to expand outside China’s borders, as demand for the currency strengthens.
Source : KPMG