CN: GDP


Tue Jul 14 21:00:00 CDT 2015

Consensus Actual Previous
Y/Y % Change 6.9% 7.0% 7.0%

Highlights
Second quarter GDP was up 7.0 percent on the year, slightly higher than expectations. For the first half of the year, GDP was also up 7.0 percent when compared with the same months a year earlier. Seasonally adjusted GDP was up 1.7 percent on the quarter. A series of stimulus measures launched late last year have helped to stabilize growth.

The stabilization follows four cuts in benchmark interest rates since November and reductions worth more than 1.5 percentage points in the required reserve ratio for banks. Premier Li Keqiang set a full-year growth target of "around 7 percent" for 2015, a goal that looks to be within reach. Annual growth in 2014 was 7.4 percent, falling short of the government's target for the first time since 1989.

An investment slowdown continues to drag on the economy, as property developers pull back on construction amid an overhang of unsold flats and factories slow expansion plans in the face of slowing sales.

Definition
Gross Domestic Product (GDP) refers to the final products at market prices produced by all resident units in a country (or a region) during a certain period of time. GDP is the core indicator of the national accounts, and also an important indicator to measure the economic conditions and the level of development of a country or region. GDP is calculated from three approaches -- production, income and expenditure -- which reflect gross domestic product and its composition from different angles.

Description
GDP is the all-inclusive measure of economic activity. The GDP report contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. GDP components such as consumer spending, business and residential investment, and price (inflation) indexes illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.

The data are compiled by NBS and the People's Bank of China (PBoC). Estimates for non-financial corporations, financial corporations, general government, household and the rest of the world sectors are published. The production accounts, distribution and use of income account, and capital account data are compiled by NBS. NBS also develops the financial account by rearranging financial transactions data in the flow of funds accounts compiled by PBoC. There are no breakdowns of government consumption expenditure, gross fixed capital formation, change in inventories and net exports. Household consumption expenditures are broken down into urban and rural. The income components of GDP are only published in the input-output tables. NBS uses the Chinese Industrial Classification of the National Economy.