INSTANT VIEW - China Q2 GDP growth rises to 7.9 pct yr/yr

BEIJING (Reuters) - China's annual GDP growth accelerated to 7.9 percent in the second quarter from 6.1 percent in the first quarter, as a surge in bank lending and government spending made it the best-performing major economy in the world.

The GDP figure, announced by the government on Thursday, was accompanied a by a batch of data for June that showed the Chinese recovery was spreading more broadly, with private investment and consumption posting healthy rises.

COMMENTARY:

WOON KHIEN CHIA, LOCAL MARKETS STRATEGIST AT ROYAL BANK OF SCOTLAND IN SINGAPORE:

"It's quite clearly the distortions have worsened. CPI and PPI are all still very weak but money growth is ballooning, so liquidity allocation is distorted.

"It looks like they want to go back to credit allocation guidance while they clamp down on the excess liquidity that is going to the wrong places with no restraint.

"There will be no tightening through interest rate hikes for now, but mopping up liquidity already started, that's not a flash in the pan move. I don't think they are trying to employ some scare tactic."

DONG XIAN'AN, CHIEF MACRO ECONOMIST AT INDUSTRIAL SECURITIES IN SHANGHAI:

"Q2 annual GDP growth at 7.9 percent means an annualised quarter-on-quarter growth of 17.5 percent.