China's economic growth picked up slightly in the second quarter as a burst of government stimulus paid dividends, but analysts said Beijing will likely need to offer more support to meet its annual growth target as the property market slows.
Analysts remain cautious about the economic outlook, noting that the pickup in growth was driven more by government support than a natural recovery in momentum, as evidenced by a surprising surge in lending by state-controlled banks in June.
Many believe the slowing property sector poses the biggest risk to the economy in the second half of the year, and could dictate whether Beijing sticks to a steady rollout of modest stimulus steps or considers more aggressive action such as interest rate cuts.
The economy grew 7.5% in April-June from a year earlier, the statistics bureau said on Wednesday, just ahead of a median forecast of 7.4% in a recent poll.
A raft of support measures helped lift the pace from an 18-month low of 7.4% in the first quarter, with infrastructure investment and related manufacturing offsetting the drag from weak exports and the cooling property market.
Stimulus measures have included sharply higher bank lending, reducing the amount of cash some banks have to hold as reserves, instructing regional governments to quicken their spending and hastening the construction of railways and public housing.
Though officials continue to describe such steps as "fine-tuning", Beijing has been steadily broadening the scope and depth of its assistance, as indicated by the June lending surge and reported moves by local governments to ease home buying restrictions.
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