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China's property development investment continues slower growth

17 July 2017

China's nationwide survey-based jobless rate was below 5 percent in June, with 7.35 million new urban jobs created in the first half of the year, the statistics bureau said on Monday.

The International Monetary Fund has forecast China's full-year growth for 2017 to hold steady at last year's level of 6.7% due to strong government spending.

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

New construction starts measured by floor area, a telling indicator of developer confidence, rose 14.0 percent in June, the highest since October 2016, according to Reuters calculations.

China eliminated around 120 million tonnes of low-end steel capacity in the first six months of this year.

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Growth in property development investment continued to decelerate to 8.5 percent in Jan. -June, down from 8.8 percent during the first five months, adding to evidence that China's property market is running out of steam amid government cooling measures to quash potential asset bubbles.

The figure, slightly better than analyst consensus, is unchanged from the previous three months' 6.9 percent expansion in gross domestic product, which was the fastest pace in more than a year, propelled by state-led investment in infrastructure projects. "It's also encouraging to see more signs of rebalancing with the pickup in retail sales growth". A report on how - or if - the USA will react could come as early as this week.

In terms of de-stocking in the property market, the floor space of unsold homes were down 9.6 percent at the end of June.

Thus, China managed to exceed its target of 6.5 percent growth, set by the government for 2017. "Growth momentum has stayed pretty high and the authorities have really tamped down the pressures on the capital outflow", said Stephen Schwartz, head of Asia-Pacific sovereign ratings at Fitch.

Fitch Ratings on Friday maintained its A-plus rating for the country but said its growing debt could trigger "economic and financial shocks".

China's property development investment continues slower growth