China GDP grows 6.9 percent in the second quarter

Growth in China’s economy this year has beaten expectations as exports recover and property construction remains strong. (Reuters)
Updated 17 July 2017
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China GDP grows 6.9 percent in the second quarter

BEIJING: The Chinese economy grew faster than expected in the second quarter, boosted by stronger industrial output and personal consumption as well as steady investments.
The country’s GDP grew 6.9 percent in the second quarter from a year earlier, the National Bureau of Statistics said on Monday, which was also the same rate as the previous quarter. Analysts have expected the Chinese economy to expand 6.8 percent in the second quarter.
Growth in China’s economy this year has beaten expectations as exports recover and property construction remains strong, though many analysts expect the world’s second-largest economy to lose steam later in the year as policy measures to rein in red-hot housing prices and a rapid build-up in debt take a greater toll on growth.
“Overall, the economy continued to show steady progress in the first half...but international instability and uncertainties are still relatively large, and the domestic long-term buildup of structural imbalances remains,” the statistics bureau said in a statement.
The government is aiming for growth of around 6.5 percent in 2017, slightly lower than last year’s actual 6.7 percent, which was the weakest pace in 26 years.
China’s factory output grew 7.6 percent in June from a year earlier, the fastest pace in three months, while fixed-asset investment expanded 8.6 percent in the first six months of the year, both beating forecasts.
Retail sales meanwhile rose 11.0 percent in June from a year earlier, the fastest pace since December 2015 and beating analysts’ expectations for a 10.6 percent rise.
An acceleration in global demand for Chinese products could be a boon for the country’s leaders as they seek to contain a dangerous build-up in debt that has ballooned to 277 percent of GDP.
“(The new data) is encouraging for global growth as well because China is the second largest economy on the planet,” said Craig James, chief economist at Commonwealth Securities in Sydney.
“Based on this data, there is no need for easing and no need really for tightening either because inflationary pressures are very much contained. So I think the People’s Bank of China just continues to be watchful.”


Online fashion retailer Boohoo’s sales almost double

Updated 25 April 2018
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Online fashion retailer Boohoo’s sales almost double

LONDON: British online fast-fashion retailer Boohoo beat forecasts with a 40 percent jump in annual profit and an almost doubling of revenue as its mainly younger customers snapped up its budget-friendly designs.
The company, which imitates the latest fashions and sells them at “pocket money” prices to mainly twentysomethings, said it had made a strong start to this year, sending its shares as much as 18 percent higher.
Its robust performance and that of bigger online peer ASOS highlights how the Internet is reshaping the British retail landscape and the clothing sector in particular.
“Against a backdrop of difficult trading in the UK clothing sector, the group continued to perform well, gaining market share in the expanding online sector,” said joint chief executives Mahmud Kamani and Carol Kane.
Founded in Manchester, northern England, in 2006, Boohoo has expanded rapidly, purchasing the PrettyLittleThing and Nasty Gal brands at the beginning of last year.
The pure Internet players are bucking a challenging backdrop for UK consumers, outflanking and taking market share from traditional rivals burdened with big store estates.
Last week the 240-year old Debenhams department store chain reported a 52 percent slump in first-half profit and warned on the full-year outlook for the second time in four months.
In stark contrast, Boohoo raised sales and profit guidance four times in 2017-18.
The company made a pretax profit of £43.3 million pounds in the year to February 28, up from £30.9 million a year earlier and topping the £39.4 million expected by analysts, according to Reuters data. Revenue soared 97 percent to £579.8 million, ahead of company guidance.
The stock has come off from 273 pence in June last year, on concerns profit growth will be held back by a step-up in investment.
However, Boohoo said on Wednesday it could invest more in systems, technology, warehouses, distribution and marketing, while still delivering substantial sales and profit growth.
Capital expenditure in 2018-19 would be £50 million- £60 million. Revenue growth was forecast at 35-40 percent, with a profit (EBITDA) margin of 9-10 percent.
Looking beyond 2018-19 it forecast sales growth of “at least” 25 percent, whilst maintaining a 10 percent EBITDA margin.
“Critically, fears of a ‘margin reset’ have not been realized,” said analysts at Peel Hunt, reiterating their “buy” recommendation.
“Changes to distribution plans means the next move is likely to be overseas,” they said.