China’s economy expanded by 6.7 per cent in the second quarter, its slowest pace since 2016, as the impact of an aggressive deleveraging campaign led to reduced investment in infrastructure and manufacturing.
The pace of annual expansion announced on Monday remains above the government’s target of “about 6.5 per cent” for this year. The slowdown comes as Beijing faces a trade war with the US adds to headwinds from slowing domestic demand.
A campaign to tackle excessive debt and financial risk that began early last year, following nearly a decade of heavy credit stimulus, has weighed on fixed-asset investment — the economy’s biggest growth driver. In particular, a drive to contain borrowing by local governments has slowed the pace of infrastructure spending.