First Half GDP Up 6.9%, Incomes Rise 7.3%


China’s official GDP growth rate for the first half of 2017 has edged ahead of consensus forecasts by economists.

The latest official data indicates that China’s total GDP in the first half of 2017 was 38.149 trillion yuan, translating into an inflation-adjusted year-on-year growth rate of 6.9%, as compared to consensus forecasts of 6.8%.

Primary industry added value saw 3.5% YoY growth in the first half of 2017 to reach 2.1987 trillion yuan, while secondary industry added value grew 6.4% to reach 15.2987 trillion yuan, and tertiary industry added value rose 7.7% to hit 206.516 trillion yun.

Services industry sees more rapid growth

China’s nationwide service industry output rose 8.3% in the first half, holding steady with the Q1 rate of expansion, for acceleration of 0.1 percentage points compared to the same period last year.

Service industry output rose by 8.6% in June, for an increase of 0.5 percentage points compared to the preceding month, and 0.6 percentage points compared to the same period last year.

Sub-sectors of the services industry enjoying more rapid growth include transportation and delivery, software, information technology, leasing and commercial services.

Overall investment growth ease, although manufacturing and private investment accelerate

China’s nationwide fixed asset investment in the first half of 2017 excluding farming households was 28.0605 trillion yuan, for YoY growth of 8.6% and a slide of 0.6 percentage points compared to the first quarter.

State-owned share-controlled investment saw growth of 12.0% to reach 10.2022 trillion yuan, while private investment grew 7.2% to reach 17.0239 trillion yuan, accelerating by 0.4 percentage points compared to the January-to-May period, and 4.4 percentage points compared to H1 2017. Private investment accounted for 60.7% of nationwide fixed asset investment.

When broken down by sector, primary sector investment saw 16.5% YoY growth to hit 869.4 billion yuan, while secondary industry investment saw 4.0% growth to reach 10.5807 trillion yuan and tertiary sector industry saw growth of 11.3% to reach 16.5104 trillion yuan.

Manufacturing sector investment saw YoY growth of 5.5% in H1 2017 to reach 8.6809 trillion yuan, accelerating 0.4 percentage points compared to the January-to-May period, and 2.2 percentage points compared the same period last year.

Nationwide real estate development investment grew 8.5% YoY to reach 5.061 trillion yuan in HQ2017, for deceleration of 0.6 percentage points compared to the first quarter.

Residential property investment grew 10.2%, while the area of new building commencements was 857.2 million square metres, for YoY growth of 10.6%.

Foreign trade structure improves as imports and exports post rapid growth 

The total import-export volume saw YoY growth of 19.6% to reach 13.1412 trillion yuan, with exports rising 15.0% to reach 7.2097 trillion yuan and imports rising 25.7% to reach 5.9315, for a trade surplus of 1.2782 trillion yuan.

H1 trade with Russia, Pakistan, Poland and Kazakhstan saw growth of 33.1%, 14.5%, 24.6% and 46.8% respectively.

Consumer price growth remains moderate, industrial cost growth moderates

Nationwide consumer prices saw YoY growth of 1.4% in H1, holding steady with growth in the first quarter. Urban consumer price inflation was 1.5% while rural consumer price inflation was 1.0%.

H1 producer prices in China saw growth of 6.6%, for a deceleration of 0.8 percentage points compared to the first quarter. June producer prices rose 6.6% YoY, for growth on par with the preceding month, while also declining 0.2% compared to May.

Urban-rural incomes narrow slightly following rapid growth

Per capita disposable income saw nominal YoY growth of 8.8% in the first half, and inflation-adjusted growth of 7.3%, for an acceleration of 0.3 percentage points compared to the first quarter and 0.8 percentage points compared to the same period last year.

Per capita urban disposable income saw an inflation-adjusted increase of 6.5% to reach 18,322 yuan, while rural disposable income saw an increase of 7.4% to reach 6,562 yuan, for 2.78 fold gap between the cities and the countryside, and a 0.01 narrowing compared to the same period last year.

Leverage and industrial overcapacity recede

The H1 nationwide industrial capacity usage rate was 76.4%, for a year-on-year increase of 3.4 percentage points.

Corporate leverage rates fell, with the debt-to-assets ratio of enterprises above designated size of 56.1% at the end of May, for a YoY decline of 0.7 percentage points.

Corporate costs continue to decline, with the cost of each 100 yuan of main business revenue for enterprises above designated size falling 0.04 yuan for the January-May period to 85.62 yuan.