Renminbi Series: China’s economic recovery gathers pace

China’s economy is humming strongly and the signs of a recovery are becoming more broad-based. According to latest data from the National Bureau of Statistics (NBS), China’s GDP grew by 6.9 percent in the second quarter, same as the first three months of the year. It is important to notice that China’s growth rate was above the 6.5 percent target of the communist government. Strong humming in the real estate sector helped China to achieve this above-targeted growth. Recovery was visible from data across the board.

• Industrial production grew by 7.6 percent from a year ago, which is the highest pace since December 2014.
• Retail sales grew by 11 percent in June from a year ago, which is the highest pace of growth since December 2015.
• Urban investments were strong at a growth rate of 8.6 percent y/y.

Chinese yuan has reversed its declining course in recent months and has strengthened from 6.97 per dollar in December last year to 6.76 per dollar as of today. We at FxWirePro expect the yuan to strengthen to as 6.69 per dollar over the year and it might strengthen to as high as 6.5 per dollar.