China's GDP grew at a slightly faster-than-expected pace in the second quarter, according to official data published Monday, as surging industrial production and solid exports kept the world's second-largest economy humming in the face of significant concerns for its financial sector.
China's economy expanded at an annual 6.9% clip in the three months ending in June, the National Statistics Bureau (NSB) said, a rate that was modestly faster than the 6.8% pace anticipated by analysts but largely in line with the rate of growth over the first quarter. Industrial output, which rose 7.6% from the same period last year, paced the GDP gains, while an 11% surge in retail sales underscored the strength of the domestic consumer economy.
The data helped push regional stocks, in the form of the MSCI Asia ex-Japan index, past a two-year high in overnight trading while the yuan gained for a sixth consecutive session against the U.S. dollar after the People's Bank of China raised the midpoint of the currency to 6.7562, its highest level in more than 8 months.
Last week, China's General Customs Administration said the country's trade surplus swelled after a stronger-than-expected rise in June exports of 11.3%, set against a significant increase in exports of 17.2% that suggests firming domestic demand despite concern for cooling property prices, boosted China's trade surplus with its global partners by 5% to $42.77 billion.
The U.S. portion of the surplus, however, rose three times faster to $25.4 billion, the highest level since October 2015, despite a recent trade agreement that will open markets in China to U.S. beef exports by mid July, with China gaining access to U.S. markets for its cooked poultry goods. The two countries will also look to open China's market to U.S. credit ratings firms and credit card payment services firms.
Another aspect of concern for President Donald Trump is the fact that steel output hit a record high 73.23 million tons in June, the NSB said, while aluminium production rose 7.4% from the same period last year to 2.93 million tons.
Trump has accused China of "dumping" steel into the U.S. market and his Commerce Secretary, Wilbur Ross, has promised "bold action" that could come in "the context of national security". A report on how -- or if -- the U.S. will react could come as early as this week.