* China's headline GDP growth stayed flat at 7%y/y in Q2, as its sequential growth picked up from Q1's
~5%q/q (annualized) to +7%, helped by stronger services sector activities, underpinned by both a buoyant
equity market and strong recovery in property sales.
* Overall credit growth stabilized in June, as higher new corporate loans, rebounding corporate bond
issuance and a pick-up in local bond issuance more than offset soft shadow banking credit growth.
* China’s H2 growth outlook remains challenging. While infrastructure investment may improve with
additional policy and funding support in Q3 and a modest export recovery, it will unlikely offset the
continued deceleration in property construction and softer growth of financial services after recent market
gyrations. We expect GDP growth to stabilize in sequential terms in Q3 but fade in Q4, and see y/y growth
decelerating in H2. We maintain our 2015 GDP growth forecast of 6.8%.