Property, construction boost China economy

BEIJING • China's real estate sector grew faster than the overall economy in the second quarter as new home purchase restrictions in the biggest cities failed to deter buyers.

Economic output by real estate brokers surged 8.8 per cent from a year earlier in the April- June period, while construction activities jumped 7.3 per cent, data from the National Bureau of Statistics showed yesterday.

The nation's gross domestic product (GDP) grew 6.7 per cent in the second quarter, faster than in the first quarter, and put the economy on track to hit the official target of 6.5 to 7 per cent for this year. Other industries such as technology, health and education grew by 9 per cent.

A housing recovery fuelled by cheap credit has supported growth this year even as headwinds loom for developers with bloated inventories.

Property sales jumped 42.1 per cent in the first half, slowing from 54.1 per cent in the first quarter after cities like Shanghai and Shenzhen tightened criteria for some home buyers.

The world's second-largest economy is continuing its transformation towards growth led by services, which are becoming a major pillar of the economy.

Services accounted for more than half of output last year for the first time, while GDP data released on Friday showed consumption made up more than 70 per cent of the expansion.

Services grew 7.5 per cent in the second quarter from a year earlier, surpassing the 6.3 per cent pace for manufacturing and 3.1 per cent for agriculture.

The financial sector expanded 5.3 per cent in the second quarter amid a sluggish stock market, slowing from the 8.1 per cent increase in the preceding three months.

BLOOMBERG, AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Sunday Times on July 17, 2016, with the headline 'Property, construction boost China economy'. Print Edition | Subscribe