Exports, production drive China’s growth

China’s economy expanded faster than expected in the second quarter, setting the country on course to comfortably meet its 2017 growth target and giving policymakers room to tackle big economic challenges ahead of key leadership changes later this year.

The boost to growth was in part driven by firmer exports and production, in particular steel, which could heighten trade tensions as the United States and China begin economic talks this week. President Trump has made the U.S. trade deficit with China a top agenda item in bilateral talks and has also flagged the steel trade as a point of contention.

China’s gross domestic product rose 6.9 percent in the second quarter from a year earlier, the same rate as the first quarter, the National Bureau of Statistics said Monday. Analysts had expected the economy to expand 6.8 percent.

The second-quarter numbers put the economy on a strong footing to meet China’s growth target of around 6.5 percent in 2017, which would give policymakers room to defuse financial risks.

While growth in the high-flying property sector has cooled this year, a rebound in exports after several years of decline has helped prevent any broader slowdown in China’s economy.

Retail spending and factory output were also bright spots in the first half. Retail sales growth rose to 10.8 percent in the second quarter from 10 percent in the first, a Reuters calculation based on official data showed.

Factory output also increased in the second quarter, although the 6.9 percent growth for the first half was only a slight pickup from recent quarters.

— Reuters

Subway redesign aims to stem sales decline

Subway wants to freshen up the look of its stores as it tries to stem a sales decline.

The sandwich chain says the redesign — which includes a brighter atmosphere, displays of vegetables behind the counter and ordering tablets — is the first major revamp since the early 2000s. The changes will take place as stores around the country are remodeled and new ones are built.

The makeover comes as Subway’s sales have fallen for four straight years amid competition from sandwich stores such as Jimmy John’s and Firehouse Subs. Since 2012, Subway’s average annual sales per store are down 13 percent at $420,000, according to industry tracker Technomic. Last year, Subway’s number of U.S. stores also shrank for the first time, although the company says it still has more than 26,200 domestic locations. Globally, the chain says it has more than 44,800.

Don Fertman, Subway’s chief development officer, said franchisee agreements require them to remodel stores every seven to 10 years.

— Associated Press

Also in Business

German airline Lufthansa increased its profit target for 2017 after a busy summer for bookings that has been boosted by demand on North American routes and a strong German economy. The airline expects its full-year adjusted earnings before interest and tax (EBIT) to exceed the 2016 level of 1.75 billion euros ($2 billion), it said Monday. Lufthansa’s adjusted EBIT nearly doubled to 1.04 billion euros in the first six months of 2017, from 529 million euros in the year-earlier period, while revenue rose to 17 billion euros from 15 billion.

A French maker of self-driving vehicles is opening its first U.S. manufacturing facility. Navya says it’s opening a 20,000-square-foot factory in Saline, Mich., about 50 miles southwest of Detroit. The company plans to hire 50 workers and make 25 driverless shuttles at the plant before the end of this year.

A Tesla driver says his car’s partially self-driving Autopilot system wasn’t responsible for a crash in Minnesota, despite what he initially told investigators. In its police report obtained by the Associated Press on Monday, officials said David Clark, 58, blamed Autopilot for a crash Saturday in Hawick, Minn.

— From news services

Coming today

10 a.m.: National Association of Home Builders releases housing market index for July.
4 p.m.:
Treasury releases international money flows data for May.
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