China’s Economy Grows 9.5%, Exceeding Estimates - Bloomberg

China’s economy and industrial production expanded more than analysts predicted, indicating the nation is maintaining momentum even after interest-rate increases to cool inflation.

Gross domestic product rose 9.5 percent in the second quarter from a year earlier, the statistics bureau said in Beijing today, after a 9.7 percent gain the previous three months. The median estimate was for a 9.3 percent pace in a Bloomberg News survey of 18 economists. Industrial output advanced 15.1 percent in June, the most since May 2010.

Stocks climbed in China on the signs that demand is holding up after the central bank boosted lending rates five times since mid-October and lifted bank reserve requirements to a record. Premier Wen Jiabao said yesterday that stabilizing prices remains the top priority, after food costs soared more than 14 percent in June.

The government “can remain focused on inflation, given that growth was pretty strong,” said Dariusz Kowalczyk, a senior strategist at Credit Agricole CIB in Hong Kong. The data “will encourage policy makers to maintain tight policy settings,” he said.

The Shanghai Composite Index of shares advanced 0.8 percent to 2,775.62 as of 11:01 a.m. local time.

The economy expanded 2.2 in the second quarter from the first three months of the year, the statistics bureau said, picking up from 2.1 percent in January to March. Read More