China Says Its Economic Growth Is Slowing | WPN World People News

China's rapid growth is slowing as the impact of its massive stimulus eases and Beijing clamps down on a credit boom.

The world's third-largest economy grew by 10.3 percent in the second quarter over a year earlier, down from the first quarter's explosive 11.9 percent expansion, the National Bureau of Statistics said Thursday.

A slowdown in Chinese growth could have global implications if it cuts demand for imported iron ore, industrial components and other foreign goods.

China rebounded quickly from the global crisis on the strength of massive stimulus and bank lending. Global companies are looking to the Chinese market to help drive sales amid weak demand elsewhere.

But Chinese leaders worry about rising inflation pressures, a surge in housing prices and possible bad debt at state-owned banks following record lending last year. They are clamping down on credit and trying to block overinvestment in industry.

"Though we have this good start, we still have to be keenly aware of the volatile situation outside China and the many difficulties and challenges we face in this country," Sheng Laiyun, a statistics bureau spokesman, said at a news conference.

The latest data leave China poised to pass Japan as the second-largest economy behind the United States. China reported 2009 output of $4.98 trillion, just behind Japan's $5.1 trillion. And China is growing much faster than its neighbor.

Consumer inflation in June eased to 2.9 percent from May's 3.1 percent, which broke through the government's official target for the year of 3 percent, the statistics bureau reported.

Source:NPR News