World slump clips China's growth

Chinese police watch over protesting workers outside a toy factory in Zhang Mu Tou in southern China . Many jobs have been lost as the slowdown hits manufacturing. Photo/ AP

BEIJING - China's economic growth slowed to 9.9 per cent in the first three quarters of 2008 as the world's financial woes started to have an impact at home, the government says.

In the third quarter, China's economy grew by 9.0 per cent, spokesman Li Xiaochao told reporters today in Beijing.

"The growth rate of the world economy has slowed down noticeably. There are more uncertain and volatile factors in the international economic climate," Li said.

"All these factors have started to release their negative impact on China's economy."

It was the first time since the fourth quarter of 2005 that quarterly growth in China slipped into single digits, according to earlier data released by the government.

The figure for growth in the first three quarters marked a weakening from 10.4 per cent in the first half of 2008, and 12.2 per cent in the first three quarters of 2007, according to earlier data published by the bureau.

Confirming the trend for a slowdown in the heavily export-dependent economy, industrial output growth stood at 15.2 per cent in the first three quarters of 2008, down from 16.3 per cent in the first half, according to the bureau.

For the month of September alone, industrial output growth was a mere 11.4 per cent, it said.

As exports are slowing, China has looked to other sources of growth, including domestic investment and consumption.

Fixed asset investments, a key gauge of government spending on infrastructure and factories, rose 27.0 per cent in the first three quarters of 2008, compared with 26.3 per cent in the first half, the bureau said.

Retail sales, a main indicator of consumer spending, increased 22.0 per cent in the first three quarters of 2008 compared with a year earlier, while rising by 23.2 per cent in the month of September, the bureau said.

China's policy makers started out the year focusing heavily on taming inflation, after food prices had spiralled out of control, but they have recently shifted their emphasis more towards boosting growth.

The figures released today showed that inflation continued to slow, standing at 7.0 per cent in the first three quarters of 2008, and 4.6 per cent for September alone.

The figures compared with 7.9 per cent inflation in the first half of 2008, and a near 12-year high of 8.7 per cent recorded for the month of February.

AFP