China’s second-quarter GDP figures came in much as expected, at 7.5% growth year-on-year. That is down from the first quarter’s 7.7% year-on-year growth rate, but the quarter-to-quarter change was up 1.7%, against the 1.6% increase in the first quarter. The prolonged slowdown that is underway continues in its gradual way. China’s growth for the first half was 7.6%, barely below 2012’s 7.8% and better than the third-quarter of last year’s nadir of 7.4%. It was also, of course, better than the official target whichever that is.
The economy’s steady but gentle deceleration is producing little of the dislocation seen in 2009 in the immediate aftermath of the 2008 global financial crisis, and consequently poses less of a threat to political stability. State media is again pushing the slower-growth-is-the-cost-of-reform line. Year-on-year fixed asset growth for the first half of the year slowed to 20.1%, which, though still high, is at least moving in the right direction for the rebalancing of the economy. Retail sales, too, are on the rise, up 13.3% in June compared to May’s 12.8% increase. If there is a dark cloud around the silver lining, it is that the disposable income of city households grew by just 6.5% in the first half of the year, down from the 9.7% pace of the same period a year earlier.