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INSTANT VIEW 4-China's Q2 +6.9 pct GDP growth matches robust Q1

BEIJING, July 17 (Reuters) - China's economy grew 6.9 percent in the second quarter from a year earlier, matching the previous quarter's robust 6.9 percent even as policymakers sought to rein in property and debt risks.

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KEY POINTS

* Q2 GDP +6.9 pct y/y (f'cast +6.8 pct, prev +6.9 pct)

* Q2 GDP +1.7 pct q/q (f'cast +1.7 pct, prev +1.3 pct)

* June industrial output +7.6 pct y/y (f'cast +6.5 pct, May+6.5)

* June retail sales +11.0 pct y/y (f'cast +10.6 pct, May

+10.7 pct)

* Jan-June fixed asset investment +8.6 pct y/y (f'cast +8.5 pct, Jan-May +8.6 pct)

* Jan-June property investment +8.5 pct vs +8.8 pct gain Jan-May y/y, according to Reuters calculations from the National Bureau of Statistics' data.

COMMENTARY:

CHUA HAK BIN, SENIOR ECONOMIST, MAYBANK KIM ENG, SINGAPORE

"The growth momentum remains strong despite concerns about the government's crackdown on shadow financing. So far this monetary tightening has not impacted real growth yet.

"Private investment has been picking up, and it's led by the New Economy parts of China. Despite the concerns about the old economy, what is clear is that the New Economy, especially in the tech side, is booming and translating into strong growth.

"This sector is not very leveraged at all and they're capitalizing on this boom and some of this is starting to export to the rest of the world. The momentum looks encouraging.

"The PBOC has been hiking rates slightly, so come year end, there's a risk that there could be a 10 basis point hike in tandem with the strengthening economy and the (U.S. Federal Reserve's) rate hike that we're expecting by year-end."

JULIAN EVANS-PRITCHARD, CHINA ECONOMIST, CAPITAL ECONOMICS

"Growth has done pretty well in the first half and there's not that much sign of a slowdown yet...the question for most people is things are still pretty good for now, but how long can this really be sustained?

"Some of the key drivers of the recovery have gone now. The leading indicators are not as positive... it's just a question of timing.

"For the first half of the year the PBOC was generally happy to allow regulatory tightening to push up rates, and they've already achieved quite a slowdown in growth of credit risk.

"Our view is they're happy to keep rates relatively high, but they don't want to push them much higher. We don't think bond yields or repo rates will rise much higher over the second half of the year."

CRAIG JAMES,CHIEF ECONOMIST, COMMONWEALTH SECURITIES, SYDNEY

"The data is quite encouraging. When you have sales, production and overall economic growth beating expectations it suggests that the Chinese economy continues to grow at a healthy clip. That suggests continued demand for Australian goods.

"It is encouraging for global growth as well because China is the second largest economy on the planet.

"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 PBOC just continues to be watchful."

IRIS PANG, ECONOMIST, GREATER CHINA, ING, HONG KONG "If you look at the growth gap between industrial production and fixed asset investment especially, you will see that growth is actually driven by exports and retail sales. That means domestic and external consumption demand.

"It is now not an investment-driven story anymore, it is now a consumption-driven story. Even manufacturing is driven by consumption domestically and externally. "My whole-year forecast is 6.5 (percent), I think I might need to adjust it to 6.7. It could be slower in the second half of the year due to some base effects, especially in the fourth quarter.

"Property prices will have an impact in the second half, but the impact might not be as big as we thought. It is only on prime cities. The third-tier and fourth-tier cities might catch up a little bit and that will offset some of the slowdown in first tier cities. "Now we have a super-regulator which will coordinate policy better. That means there will be tighter policies on the whole financial sector and usually tighter policy will translate into high interest rates .. and that will have a negative impact on the second half growth."

JANU CHAN, SENIOR ECONOMIST, ST GEORGE BANK, SYDNEY

"Interesting to see you have both retailing and industrial production strengthen, reflecting a transition that the government was hoping to see. That's a reflection that the stimulus that's been in place is helping to support that. It's also a reflection of global demand that is a bit stronger.

"You'd anticipate that there is more confidence in China. I think the best way to determine where the flows are going to be is by looking at the U.S. dollar. You'd anticipate that this data would instill confidence in keeping money in China. And the USD is also depreciating so that means less pressure on outflows."

MARKET REACTION

The Australian dollar,a proxy for China plays, recovered earlier falls to trade at $0.7820 at 0217 GMT.

China's major CSI300 stock index was down 1.1 percent at 3368 at 0219 GMT and the SSE Composite was down 1.5 percent at 3176.

BACKGROUND

- China's economy has surprised global financial markets and investors by rebounding more solidly than expected so far this year, driven by a renaissance in "smokestack" industries such as steel and strong growth in the services sector.

- Strong government infrastructure spending and a frenzied housing market have helped fuel a year-long construction boom, boosting China's strong demand for imported industrial commodities such as iron ore.

- Exports are showing strength, though the outlook is clouded by fears of growing U.S. trade protectionism.

- Many economists, however, believe the economy will soon lose steam, arguing that the impact of earlier stimulus measures will start to fade.

- Some companies' financing costs are starting to rise as authorities clamp down on riskier forms of lending, and more local governments are imposing tougher restrictions on property buying in a bid to cool speculation and overheated home prices.

- China's government has set a more modest economic growth target of around 6.5 percent this year, from a range of 6.5 to 7 percent in 2016 and an actual 6.7 percent, which was the slowest pace of expansion in 26 years. (Reporting by Reuters Shangai newsroom and Asia bureaus; Compiled by Asia Desk; Editing by Eric Meijer)