China's GDP up 6.9% in Q2

The quarterly pace came up from 6.7 percent for the first three quarters of 2016 and 6.8 percent for the final quarter of past year.

China's economy grew at an annual rate of 6.9% between April and June according to official figures, slightly higher than forecast.

The U.S. dollar index (DXY) continued to trade near 11-month lows at the start of the week.

In terms of quarters, both Q1 and Q2 saw the same 6.9 percent growth.

China reported second quarter growth data Monday that topped expectations.

"Overall, the economy continued to show steady progress in the first half...but global 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.

Many analysts expected China's economy to slow as those policies kicked in.

In 2016, China's GDP grew 6.7 percent, which is its worst performance in the past 26 years.

"This time a year ago, things were a bit dicey with concerns about a growth slowdown and pressure on capital outflows and the currency, but as we expected in the lead-up to party congress, stability has reigned".

Retail spending and factory output were also bright spots in the first half.

Property also performed strongly, with fixed-asset investment climbing 8.6 percent in the first half of the year. Overall industrial production rose 7.6 percent in June from a year earlier, the government announced on Monday morning, an unexpectedly faster tempo than May's 6.5 percent.

A survey by China's central bank in late June showed that 31.2 percent of households expect housing prices to rise in the third quarter of this year, while 46.1 percent of households tipped them to remain basically unchanged.

With risks rising in some parts of the economy due to leveraged investments and over-borrowing, officials need to carefully balance support for growth with risk controls.

"Based on this data, there is no need for easing and no need really for tightening either because inflationary pressures are very much contained. So I think the People's Bank of China just continues to be watchful".

That is mostly a outcome of its efforts to reduce debt.

Analysts said that is likely to lead to creation of new regulatory structures, though a report issued following the meeting called for "appropriate sequencing", suggesting Beijing might move more slowly than some reform advocates want. The trade surplus widened from $US40.8 billion in May to $US42.8 billion in June.

China said on Friday afternoon that it was revising its economic output data to take better account of fast-growing sectors like intellectual property, health care, tourism and so-called emerging industries.

Vanessa Coleman

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