Economic growth continues to show resilience despite rising trade tensions. China’s real GDP rose by +6.7% y/y in Q2 (after +6.8% in Q1). The tertiary sector accelerated to +7.8% y/y in Q2 (up from +7.5% in Q1) and remains the main growth driver. The industrial sector posted slower growth of +6% y/y (down from +6.3% in Q1). Short-term indicators suggest that economic growth is slowing, yet consumer spending is still acting as a buffer. Industrial production weakened (+6% y/y in June, after +6.8% y/y in May). Nominal urban fixed asset investment growth edged down to +6% y/y in January-June (from +6.1% y/y in January-May). Yet, growth of nominal retail sales of consumer goods accelerated to +9% y/y in June (from +8.5% in May). Against this background, we maintain our full-year GDP growth forecasts of +6.6% in 2018 and +6.3% in 2019.
