China's economic growth slows

Beijing - China said on Tuesday its economy grew at a slower pace in the third quarter as government efforts to tame inflation and turbulence in Europe and the United States curbed business activity.

Gross domestic product in the world's second-largest economy grew 9.1% year-on-year in the quarter, the National Bureau of Statistics (NBS) said, compared with a 9.5% year-on-year expansion in the second quarter.

Year-on-year growth in China has slowed for three straight quarters as Beijing - anxious about soaring costs - has restricted lending and hiked interest rates, while US and European demand for Chinese-made products has weakened.

Other economic indicators also suggested China was losing steam just as the global economy teeters on the edge of another recession.

"Currently the economic growth is facing an even more complicated external and internal environment," NBS spokesperson Sheng Laiyun said in a statement.

Industrial output growth from China's millions of factories and workshops slowed slightly to 14.2% in the first nine months of the year as the downturn in major export markets hurt the country's vast manufacturing sector.

For September alone, production expanded by 13.8% year-on-year compared with 13.5% in August.

Fixed asset investment, a key measure of government spending on infrastructure, rose 24.9% in the first nine months compared with the same period a year ago.

Retail sales rose 17.7% year-on-year in September and 17% in the first nine months of 2011.

China has been the growth engine for the global economy and the steady slowdown is likely to fuel concerns about its ability to help debt-laden eurozone countries and the United States.

But Beijing faces a policy dilemma of slowing growth and high inflation which has the historic potential to trigger social unrest in the country of more than 1.3 billion people.

Despite persistent efforts to rein in soaring household costs, inflation has hovered above six percent for several months and Sheng noted that "macroeconomic control policies should maintain continuity and stability".

The politically sensitive inflation rate dipped slightly to 6.1% in September but remained well above the official annual target of four percent.