Uncertain Economic Scenario Weighing On Chinese Equity Market

Chinese economy grew more than expected in Q2. GDP expanded by 6.7%, slightly exceeding consensus expectations for a 6.6% increase. The data were in line with the government’s 2016 GDP target of a growth between 6.5% and 7%, down from 6.9% in 2015. The breakdown of the data indicated that the rebalancing of the Chinese economy toward greater consumer spending and lower investment is going on. The contribution of investment to growth dropped from 2.9% in Q1 to 2.5%, and the contribution of personal consumption rose from 4.2% to 4.9%. Net trade subtracted 0.7% from total GDP growth.

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