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China's growth speeds up to 7.5%, beats expectations

BEIJING -- Chinese growth accelerated to a forecast-beating 7.5 percent in the second quarter, official data showed Wednesday, as government stimulus provided a much-needed boost to the world's second-largest economy.

The April-June figure from the National Bureau of Statistics compared with 7.4 percent in the previous three months and exceeded the median forecast of 7.4 percent in a survey of 17 economists by AFP.

But some analysts remain pessimistic about the full-year outlook given persistent concerns over the huge but troubled property sector.

“Generally speaking, China's economy showed good momentum of stable and moderate growth in the first half-year,” NBS spokesman Sheng Laiyun told reporters. “However we should keep in mind that the domestic and international economic environment is still complicated and the national economy still faces many challenges.”

The NBS also said China's economy expanded 7.4 percent in the first half of the year.

The results come after Beijing introduced a series of policies since April in response to concerns over slowing growth, including tax breaks for small enterprises, targeted infrastructure spending and the encouragement of lending in rural areas and to small companies.

Wendy Chen, Shanghai-based economist with Nomura International, told AFP: “A series of policy easing measures have taken effect, and the economy has already bottomed out and recovered.”

Growth would be “slightly better” in the second half of the year, she said, but added: “We expect more policy easing in the third quarter, in all aspects including the property sector.”

The government's efforts, which economists have dubbed “mini-stimulus,” have had a short-term stabilizing effect.

But the NBS statement said most key property indicators declined in the first half, with home sales values down 9.2 percent.

Ma Xiaoping, Beijing-based economist for British bank HSBC, cited the real-estate sector as the “main downward risk in the second half,” noting the property investment growth rate showed a significant decline.

“If this trend continues, we will need to see whether infrastructure construction and manufacturing can offset the impact from the property industry decline,” she told AFP.

The NBS's Sheng acknowledged the property market correction will add to short-term economic pressures.

“But in the long term, it will be conducive to the healthy development of the real-estate industry itself as well as the healthy and sustainable development of the national economy,” he said.

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