China growth steadies on state spending but concerns for future remain

State spending kept Chinese growth on the road today, although experts fretted over tougher times ahead for the world’s second-biggest economy.

China’s Red Dragon economy expanded at an annual pace of 6.7% in the second quarter, matching the previous three months and beating economists’ forecasts for 6.6% growth.

Following the turmoil wreaked by last month’s Brexit vote, the figures, though treated with heavy scepticism by investors, eased fears of a hard landing.

China has been trying to rebalance its economy from one dependent on manufacturing and industry to a consumer-and-service-led one. It has also weakened the yuan to make exports cheaper.

Rising government infrastructure spending was largely responsible for the performance, raising doubts about future prospects.