China’s Q2 macroeconomic data contained several contradictory signals, with headline industrial output growth accelerating and GDP growth stabilizing at 6.9%, while key components moved in the opposite direction and growth in the services sector continued to slow. The PBOC’s tightening campaign has kept credit growth firmly under pressure, particularly to corporates, while external demand conditions and the resilient property sector have maintained momentum in China’s economy so far in 2017.
