Wang Tao: China to Offer Modest Policy Support for Second-Half Growth Rebound

China's second-quarter GDP growth came in weaker than expected. What can we expect in terms of policy easing and the economic recovery in the second half?

Growth momentum has remained soft in July. The key drag still comes from the continued sharp property downturn. In 30 cities, property sales volume dropped further by 35% in the first 16 days of July from June while down 33% year-on-year. Auto retail sales declined by 7% year-on-year in the first nine days of July from a 2% year-on-year drop in June, while auto wholesales contracted 9% year-on-year after growing by 2% in June, largely due to the base effect. In 18 cities, subway passenger turnover stayed strong, with rides taking 70 million trips in July, edging up a bit further from 65 million in June. Meanwhile, port cargo throughput improved a bit to 7.3% year-on-year in the first 16 days of July, compared with a 2% decrease in June. Steel production improved to 2.1% year-on-year in the first 10 days from a year-on-year decline of 3.3% in June.