China’s economic growth slows amid credit curbs
BEIJING – China’s rapid growth is slowing as its huge stimulus winds down and Beijing cools a credit boom, possibly weakening a global recovery. The world’s third-largest economy expanded by 10.3 per cent in the second quarter over a year earlier, down from the first quarter’s explosive 11.9 per cent growth, the National Bureau of Statistics said. China’s ability to help drive a global recovery might be dented if slower growth cuts its appetite for United States and European factory machinery, industrial components from Asian suppliers, and iron ore from Australia and Brazil.
“The speed of economic growth is declining fast,” said economist Xing Ziqiang of China International Capital Corporation in Beijing. “Countries that export raw materials to China will feel a bigger impact from declining investment.”
China rebounded quickly from the global downturn, powered by a US$586 billion stimulus and a flood of bank lending. But communist leaders worry about surging home prices and a possible spike in bad loans at state-owned banks. They have imposed curbs on lending and investment, key drivers of growth and demand for raw materials. A statistics bureau spokesman, Sheng Laiyun, said despite the decline, growth is “very high” and within the government’s target range. The official growth target for the year is eight per cent, which analysts say China easily should achieve. (AP)