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China's economic growth slows to lowest rate in more than three years

 

Ap
Thursday 18 October 2012 07:59 BST
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China's economic growth tumbled to the lowest in more than three years in the latest quarter but retail sales and other activity accelerated in a sign a recovery from the painful downturn is taking shape.

The world's second-largest economy grew by 7.4% in the three months ending in September, below the Communist Party's 7.5% target for the full year, data showed today.

That was down from the previous quarter's 7.6% and the lowest since the first quarter of 2009 in the midst of the global crisis.

In a sign of an emerging recovery, economic activity in the latest quarter was up by 2.2% from the previous three month period, the biggest quarter-on-quarter gain in a year, said Dariusz Kowalczyk, senior economist for Credit Agricole CIB in Hong Kong.

"This confirms that the economy is rebounding from the trough in the first quarter of this year," Mr Kowalczyk said. "There is no room and no need for further major stimulus."

Beijing has cut interest rates twice since early June and is injecting money into the economy through high investment by state companies and spending on building subways and other public works.

But authorities have avoided launching a massive stimulus after huge spending in response to the 2008 global crisis fuelled inflation and a wasteful building boom.

Retail sales rose 14.4%, accelerating from the 14.1% rate for the first half of the year. Investment in factories and other fixed assets also improved, rising 20.5% in the first nine months of the year, up from a 20.2% rate for the first eight months.

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