However, its statement on Wednesday acknowledged that the domestic and worldwide economic situation remained “complex”, and officials have said previously that meeting China’s target of “about 7 percent” growth for the year may be an “arduous task”.

He cautioned however, that “headwinds in the economy” were “still strong” and authorities were likely to further ease monetary policy in the form of another interest rate cut and further reduction in bank reserve requirements. This was the fastest growth since the start of the year and above the expected increase of 6%.

China reported better growth than expected for the second quarter, but Beijing warned the economy still faced rough weather ahead as the government pressed on with its restructuring plans. Since November, Beijing has cut interest rates four times and pumped money into the economy through spending on construction.

However, Capital Economics said one reason why the improved economic news flow has failed to arrest the stock market decline, which has seen shares shed more than 25% of their value over the last month, is investors’ lack of faith in the official data.

Much of the slowdown from China’s double-digit growth in the previous decade was self-imposed as communist leaders tightened controls to cool inflation, surging housing costs and an investment boom.

Analysts had widely predicted that economic growth would dip from 7% in the first quarter to around 6.8% in the second.

Retail sales quickened to 10.6 per cent, compared with expectations for a 10.2 per cent gain.

China’s economic pulse appears to be steadying, with June retail sales and industrial production as well as second-quarter gross domestic product (GDP) all beating forecasts.

The Chinese government has been extremely active in market intervention of late, injecting further fiscal stimuli into the economy on multiple occasions this year, and engaging in an unprecedented stock market correction earlier in July, in a bid to steady market volatility.

To buttress the economy and prevent a rout in the stock market, China has continued escalating policy supports during the past months. The rise in property investment was 4.6 percent – the slowest level of growth since the first quarter of 2009, the NBS said.

The GDP has hit 29.7 trillion yuan ($4.9 trillion) in the first half of the year, according to NBS data.

Though a more detailed breakdown by sector will be published this month, economists estimate that China’s surging stock markets, up some 150 per cent over the past 12 months, have added up to 0.4 percentage points to the economy.

It may not be the last one.

The biggest brake on growth is “still the ongoing property adjustment”, Wang Tao, chief China economist at UBS Group AG in Hong Kong, said in an interview on Bloomberg Television. Chinese stock markets did not celebrate the growth figures, with benchmark indexes down more than two per cent.

Recently, the government has taken a series steps to arrest an unprecedented crash in the Chinese stock market since mid-June and boost investor confidence.

“The economy developed with positive changes, and the vitality of economic development was strengthened”, the NBS said.

“I think that at this particular moment – given the fragile sentiment which is still recovering from the market meltdown – not having very bad numbers is helpful”.