Updated July 17, 2017

BEIJING—China’s economy steamed along in the second quarter, beating forecasts and matching the 6.9% expansion in the first, as Beijing balances its growth objectives against the need to rein in excessive credit and an overheating property market.

That there was no deceleration in growth is a powerful signal that Beijing will be able to maintain stability in the world’s second-largest economy ahead of a leadership shuffle this year. However, economists said rising financing costs and some cooling in the property market are expected to weigh down growth in the year’s second half.

China’s growth data released Monday by the National Bureau of Statistics came in above a forecast for 6.8% growth by economists polled by The Wall Street Journal.

On a quarter-over-quarter, seasonally adjusted basis, gross domestic product expanded 1.7%, the bureau said, compared with growth of 1.3% in the first quarter, suggesting that momentum in the economy may be even stronger than the year-over-year figure indicates.

At a high-level financial conference this past weekend, President Xi Jinping made clear that the regulatory tightening would continue apace.

Robust overseas shipments, reflecting renewed strength in the global economy, and solid consumption at home helped offset a slowdown in investment.

The latest result leaves little doubt that China will meet its annual growth target of “about 6.5%,” though economists said they expect some deceleration during the rest of the year.

“Though the Chinese economy was holding up better than expected in the first half of the year, a slowdown is kind of inevitable,” said Zhou Hao, an economist with Commerzbank AG .

There are also doubts about how accurately the data reflects actual momentum in the economy. China said Friday it was revising the way it measures GDP to better align its data with international standards, adding the health-care, tourism and “new, emerging economy” industries to its calculations.

The statistics bureau said Monday the change didn’t affect second-quarter growth data as the revisions will take some time to implement.

Chen Xiaohui, a sales manager at Foshan Top Furniture Co., a private company based in Guangdong province, said that her company received more orders—especially from the overseas market—this year but that rising operating costs at home were squeezing profitability.

“Our factory has been running at full capacity all the time this year, but that doesn’t mean our profits are improving because costs—raw materials and labor—have been rising rapidly,” she said.

The latest monthly industrial production and retail sales figures, also released Monday, largely tallied with the GDP data. Industrial output rose 7.6% in June from a year earlier, coming in above both May’s 6.5% gain and market expectations. Retail sales grew by 11.0% in June from a year earlier, accelerating from the previous month’s 10.7% and also beating forecasts. Fixed-asset investment in nonrural areas of China climbed 8.6% year over year in the first six months of 2017, matching the increase in the January-May period but exceeding economists’ expectations.

A deceleration in property investment was an indication that still-robust housing sales might lose steam later this year. Large developers have pulled back on new construction as credit becomes harder to come by and local governments set restrictions on property purchases. The property sector accounts for about a third of overall GDP.

“The slowdown from the property sector is the biggest downward risk for the Chinese economy in the second half of the year,” said Larry Hu, an economist with Macquarie Research.

Recent regulatory tightening is likely to start weighing on growth as lending rates are expected to stay high. At the same time, the financial sector is likely to contribute less to growth as the clampdown on off-book investments continues, Mr. Zhou said.

Beijing’s steps to put the economy on a more secure footing include raising some short-term interest rates and forcing banks to unwind hidden loans and investments.

A spending spree, originally triggered by stimulus after the 2008 global financial crisis, helped drive growth in China in recent years as local governments and companies borrowed money to build roads, airports and apartments. The debt-fueled growth model has left the economy increasingly overleveraged while generating less in the way of direct benefit to the economy.

Overall credit has grown at a faster pace than the Chinese economy during this period, alarming policy makers and investors around the world. In May, Moody’s Investors Service downgraded China’s credit rating for the first time in nearly three decades, saying it believes the rapid buildup of debt is eroding the country’s financial strength.

“The rosy picture, especially strong growth in June, will prove to be a blip. China is not going to have a big rebound and the slowdown will reappear in the third quarter,” said Macquarie’s Mr. Hu.