China’s rapid growth slows further

October 22, 2010 at 12:00a.m.

Associated Press

BEIJING

China’s rapid growth slowed in the latest quarter as Beijing steered its expansion to a more-sustainable level, possibly cutting its contribution to a global recovery.

The world’s second-largest economy grew 9.6 percent in the July-September quarter over a year earlier, official figures showed Thursday. That was down from the previous quarter’s 10.3 percent but still by far the highest of any major economy.

Politically sensitive inflation edged up in September on higher food costs, but incomes also rose strongly.

The growth decline might dent a global recovery as China’s appetite for iron ore, factory machinery and other imports weakens. That might hurt the United States, Australia, Europe and other economies that are looking to relatively robust China to power exports.

“Short-term, the slowdown means China will have less demand for goods from the rest of the world,” said Alistair Thornton, China analyst for IHS Global Insight. “But long-term, the slowdown could be a benefit to the world economy because the Chinese economy cannot keep going at such a high pace and in such an unbalanced way.”

Asian stock markets were mixed amid concern slower Chinese growth might mean less demand for raw materials and industrial components from neighboring economies.

Beijing is trying to restore normal economic conditions after a huge stimulus that helped China quickly rebound from the global crisis. Communist leaders want to guide growth to a manageable pace and encourage Chinese consumer spending to rebalance the economy away from heavy reliance on exports and investment. Beijing’s growth target for the year is 8 percent, while the World Bank is forecasting 9.5 percent.