China’s economy grew an annual 7 percent in the second quarter, beating analysts’ forecasts, though its volatile stock markets took a sharp dive in a reminder of the threats to Beijing’s efforts to direct the economy out of a slowdown.
Policymakers had already unleashed a series of measures to pull stocks out of a 30 percent nosedive and appeared to have succeeded last week, but Wednesday’s tumble could reawaken concerns over the government’s ability to manage the economy.
The day began on a positive note with the growth figures and monthly activity data that also beat expectations across the board, with factory output hitting a five-month high, following reports of increased bank lending on Tuesday.
As the National Bureau of Statistics released the upbeat figures, it described the stock markets as key to economic stability. As if on cue, the key indexes, already down in morning trade, fell more than 4 percent in the afternoon. Read more