(Bloomberg) -- China’s economic expansion held up, offering policy makers a buffer as the trade conflict with the U.S. intensifies.

Gross domestic product increased 6.7 percent in the second quarter from a year earlier, the same as forecast in a Bloomberg survey and down slightly from the 6.8 percent pace in the previous quarter.

• Industrial output rose 6 percent last month from a year earlier, versus the forecast of 6.5 percent, the statistics office said
• Retail sales increased 9 percent in June, compared with the forecast 8.8 percent
• Fixed-asset investment climbed 6 percent in the first six months, the same as forecast
• The urban monthly surveyed unemployment rate stood at 4.8 percent at end-June

A robust economy heading into the second half of the year provides support on two policy fronts: Withstanding the potential negative effects of higher barriers to trade with the U.S., and continuing with a multi-year campaign to control debt and clean-up the financial system. After an acceleration in 2017, the world’s second-largest economy is forecast to slow this year, with the government targeting expansion of 6.5 percent.

More growth headwinds will come in the second half, according to UBS Group AG economists, as property activity is likely to decelerate, infrastructure investment stays weak and export growth moderates on rising trade frictions. “On the other hand, a manufacturing investment revival and resilient consumption should offer some cushion,” Wang Tao and Zhang Ning wrote in a recent note.

To contact Bloomberg News staff for this story: Xiaoqing Pi in Beijing at xpi1@bloomberg.net

To contact the editors responsible for this story: Jeffrey Black at jblack25@bloomberg.net, James Mayger

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