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Early yesterday, Chinese GDP figures hit the airwaves and unfortunately, disappointed those who were hoping for an upside surprise. GDP growth for the second quarter sank to 7.6%, which was slightly worse than the expected 7.7% uptick.

Some of you may be thinking, “Yo Mr. Gump, ain’t 7.6% a good thing? That’s way better than what Uncle Sam’s been hitting lately!”

My answer to you, my young padawan, is that you always have to keep things in PERSPECTIVE. Take note that China has consistently been hitting double-digit growth numbers for quite some time now. Also, this marks the SIXTH consecutive month that quarterly GDP dropped! Yikes!

Chinese Quarterly GDP Figures

Apparently, exports played a big role in the decline this past quarter. Exports grew by just 9.2% over the first half of 2012, down from the massive 24% growth we saw in 2011. Apparently, all the bad news in Europe has stopped eurozone companies from ordering Chinese goods.

Another industry that also contributed to the dismal performance last quarter was the real estate market.

Stagnant sales have prevented developers from putting up new projects, which has had a carry-over effect on other industries such as those of construction and appliances. Keep in mind that real estate accounts for 12% of total GDP growth, so if the real estate market is struggling, it puts a huge dent in GDP figures.

Despite the poor news, we didn’t see too much of a negative reaction in the markets. In fact, some analysts believe that this may actually be a bottom for the Chinese economy! Say whut??

Analysts point to the fact that the fixed investment account actually picked up last June. Apparently, year-to-date fixed investment growth in May clocked in at 20.1%, while June’s figure was at 20.4%. This means that more and more companies are looking to invest in capital-intensive projects.

Furthermore, recently released banking data shows that lending has picked up over the past month, reaching 920 billion yuan. This was a nice improvement from the 730 billion yuan worth of loans we saw in May.

Word on the Great Wall is that this recent surge in fixed investment and lending growth may even continue over the next few months, thanks to the recent moves by the People’s Bank of China.

In case you’ve been ditching class lately, let me remind you that the PBoC has been quite active with regard to monetary policy. Over the past six months, the PBoC has repeatedly slashed its reserve requirement ratio, which now stands at just 20.00%.

Meanwhile, the bank also cut its baseline rates last week by 25 basis points, bringing them down to 3.00%.

Seeing as how Chinese officials have expressed a willingness to maintain accommodative monetary policies, some analysts believe that we could be in for a nice rebound during the third and fourth quarters. They expect to see more banks and companies avail of the ultra-loose policies and use them to fund their businesses and projects, which in turn, would boost the Chinese economy.

Of course, one month does not make a trend. We’ll have to wait and see how everything plays out over the next three months. As the old cliché goes, only time will tell whether the PBoC’s moves will be effective or not.