China's economic growth shows sign of stabilization, with the GDP posting a 7 percent growth rate in the second quarter, the National Bureau of Statistics said on Wednesday.

Economists said the stable growth momentum is underpinned by the slight rebound in industrial production. They expect the government to continue escalate policy supports in the coming months.

The service sector, or the tertiary industry, registered fast expansion in the first half, at a rate of 8.4 percent, compared with 7.9 percent in the first quarter, supported by buoyant stock market trading and recovering property sales.

It is higher than the growth rate of the industrial sector, or the secondary industry, that expanded by 6.1 percent.

Industrial output growth accelerated to 6.8 percent in June, up from 6.1 percent in May. The fixed-asset investment growth in the first six months slightly declined to 11.4 percent year-on-year from 13.5 percent in the first quarter, due to the contraction of real estate investment despite the government's supportive policy.

The growth of retail sales of consumer goods remained stable, at a rate of 10.4 percent from January to June, compared with 10.6 percent in the first quarter. More pragmatic policy measures may pave the way for the economic uptick in the third quarter, said Wang Tao, chief economist in China at the UBS AG.

To buttress domestic demand, the government has continued escalating policy supports during the past month, taking more pragmatic measures to speed up infrastructure construction investment projects, she said.

"The marginally loosened reins over local government activities and more policy efforts to improve monetary transmission may set the stage for the uptick since July in sequential growth," helping the year's GDP growth to meet the annual target, said Wang.