MNI BRIEF: China's Recovery To Continue Steadily In H2: NBS

China's economic recovery will continue in H2, Liu Aihua, spokeswoman of the National Bureau of Statistics, said on Thursday, citing strong domestic demand and market confidence.

Second quarter GDP slowed to 7.9% from Q1's record gain of 18.3%, and a tad below the 8.0% expansion expected. The data came after the People's Bank of China last week cut the cash reserve ratio requirement for all banks as concerns of a second-half slowdown gained traction.

Domestic demand including retail sales and investment growth have contributed 80.9% to the 12.7% GDP growth in H1, an increase of 4.9% from Q1, said Liu, adding that external demand is improving on the recovery of overseas economies. China's foreign trade is expected to maintain relatively rapid growth throughout the year, Liu continued.

Consumer inflation conditions should remain moderate this year, said Liu. She noted that food prices will remain stable due to the sufficient supply of grains and the government's increasing state reserves to stabilise falling pork prices, while service prices are still at a low level in recent years.

But Liu also noted that rising commodity prices are pressuring SMEs, requiring more reforms to deal with possible cyclical risks from input costs.