China’s economic growth cools in Q3, inflation eases

| October 18, 2011

The National Bureau of Statistics has today reported China’s economic growth continued to slow in the July to September period – the third consecutive quarter in which growth has eased.

However, growth was still strong at an annual rate of 9.1% in the third quarter, albeit down from 9.5% in the previous quarter, and below forecasts.

The cooling of growth comes as the country endeavours to bring inflation under control by tightening monetary policy.

There are fears that sluggish growth in the US, together with the euro zone debt crisis, may impact negatively on China’s growth.

Meanwhile, figures from the National Bureau of Statistics yesterday revealed inflation eased in September to 6.1% - falling from a 37-month high in July.

The People’s Bank of China has lifted rates five times in the last year to combat stubbornly high inflation.

According to analysts, the measures have helped but, at the same time, curbed economic growth.

Beijing faces a dilemma of slowing growth and high inflation which has the potential to trigger civil unrest.

Inflation in China continues to remain above the official target of 4%, attributed to soaring food prices.

However, China’s growth remains one of the fastest in Asia and it is likely to remain the world’s second largest economy for some time to come.

A recent report suggested China is on track to become the world’s largest economy by 2025 due to its rapidly growing population and booming industry.

In other news today, factory output in China grew by 18% in September on an annual basis and while the figure was up on the previous month, China’s export-led growth may slow down further in the coming months, according to analysts.

Last week, it was revealed that China’s annual rate of export growth slowed to 17.1% last month, down from 24.5% the previous month.

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