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China's economic growth slows as Beijing curbs credit boom

China's economic growth slows as Beijing curbs credit boom

China's rapid growth is slowing as the impact of its huge stimulus fades and Beijing clamps down on a credit boom.
The world's third-largest economy expanded by 10.3 percent in the second quarter over a year earlier, down from the first quarter's explosive 11.9 percent growth, the National Bureau of Statistics said yesterday.
A slowdown could hurt China's trading partners and might dent a global recovery if it cuts demand for iron ore, industrial components and other imports. Global companies are looking to China to drive demand amid weak sales elsewhere.
"The speed of economic growth is declining fast," said economist Xing Ziqiang of China International Capital Corp. 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 4 trillion yuan (US$586 billion) stimulus and a flood of bank lending. But communist leaders worry about surging home prices and possible 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 target range. The government's growth target for the year is 8 percent, which analysts say China easily should achieve.
"A slowdown in the growth rate will benefit the economy because it will prevent it from growing too fast and being overheated," Sheng said at a news conference.
Sheng said lower growth also would help Beijing's effort to boost domestic consumption and reduce reliance on resource-intensive investment and exports to drive growth.