Stock markets hit record highs as Chinese GDP beats forecasts

Soy agreement is latest China-U.S. agreement in 100-day round

Soy agreement is latest China-U.S. agreement in 100-day round

With two quarters of GDP expansion at 6.9 percent against a lower full-year target, the Chinese government will now have greater tolerance of slower growth in the second half of the year, said Aidan Yao, emerging Asia economist at AXA Investment Managers.

Chinese economic growth topped expectations yet again in the June quarter with GDP expanding 6.9% from a year earlier.

"Overall, the economy continued to show steady progress in the first half...but worldwide instability and uncertainties are still relatively large, and the domestic long-term buildup of structural imbalances remain", a statement released by China's National Bureau of Statistics said.

"However, we must be aware that there are still many unstable and uncertain factors overseas and long-term structural contradictions remain prominent at home".

"Overall, the economy continued to show steady progress in the first half", the bureau's statement said.

Nomura Securities said in a report after Monday's data release that given the data, it was raising the forecast for the third-quarter growth to 6.8 percent from the previous 6.6 percent, and the annual growth forecast to 6.8 percent from 6.7 percent.

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But the latest data is well above Beijing's 6.5% growth target for 2017.

Value-added industrial output in June rose by 7.6%.

The stronger growth also means officials will have more room to address the growing debt problem, as China continues to place controlling risk and deleveraging at the forefront of financial policy this year. Since the end of 2016, dozens of local governments have passed or expanded their restrictions on house purchases and increased the minimum down payment required for a mortgage.

Year-on-year growth in retail sales accelerated to 11 percent in June, from 10.7 percent in May, while fixed-asset investment also picked up speed in June. A report on how - or if - the USA will react could come as early as this week.

Fixed-asset investment in non-rural areas increased 8.6% in the first half of the year. The growth was forecast to stay at 6.5%.

Output during the January-June period was down 5.1% year on year at about 3.89-million barrels a day.

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