China's economy still on track despite Q2 growth slowdown

Economic data Thursday confirmed market expectations China's economic growth rate has slowed but officials said the country's economy is still on track.

The world's third largest economy expanded at a 10.3-percent year-on-year rate in the second quarter, slower than the 11.9-percent growth in the first quarter and the 10.7-percent growth in last quarter of 2009, the National Bureau of Statistics (NBS) said Thursday.

A WELCOME SLOWDOWN

Many economists welcomed the economy's cooling, saying the slower growth is more sustainable.

The moderation in growth, which the government expected, will help accelerate the transformation of the economic growth pattern and prevent economic overheating, NBS spokesman Sheng Laiyun told a press conference.

Although the pace of second-quarter growth slowed, it was still strong, Sheng said.

Economists had forecast about 10.5-percent growth, as the effects of the country's massive economic stimulus waned.

According to preliminary statistics, China's gross domestic product (GDP) hit 17.28 trillion yuan (2.55 trillion U.S. dollars) in the first six months of this year, up 11.1 percent from a year earlier.

The growth rate was 3.7 percentage points higher than in the same period last year, when the country's economy was still wrestling with the effects of the global financial crisis.

Inflation eased in June. China's consumer price index slowed to a 2.9 percent rise from 3.1 percent in May. The figure was below market forecasts, which ranged from 3.1 percent to 3.5 percent.

The Producer Price Index grew 6.4 percent year on year in June, lower than May's increase of 7.1 percent.

Other data released Thursday also pointed to a slowdown, with growth rates for industrial production, consumption and investment all easing.

China's industrial value-added output grew 13.7 percent in June year on year, down from a 16.5-percent increase in May.

Retail sales expanded 18.3 percent in June year on year, slowing from May's 18.7 percent.

Urban fixed asset investment was up 25.5 percent year on year in the first six months after a 25.9-percent gain in the January-May period.

Source: Xinhua