China's economy grew faster than expected in the second quarter as industrial output and consumption picked up and investment remained strong, though analysts expect slower growth over the rest of the year as policymakers seek to reduce financial risk.

The economy grew 6.9 per cent in the second quarter from a year earlier, the same rate as the first quarter, the National Bureau of Statistics said on Monday. Analysts polled by Reuters had expected the economy to expand 6.8 per cent in the April-June quarter.

President Xi Jinping's government is aiming for economic growth of around 6.5 per cent in 2017. Credit:Bloomberg

On a quarterly basis, growth picked up to 1.7 per cent from 1.3 per cent in the first quarter, in line with expectations.

Strength in retail sale and industrial output data helped offset a weak start for China stocks, which may have been linked to talk of tighter financial regulations.