Slowing growth suggests China soft landing

Hopes of a soft landing for China's economy were raised yesterday despite its slowest advance since the worst depths of the financial crisis.

China's economy grew 7.4 per cent year on year between July and September – the lowest since the beginning of 2009 and below the Chinese government's official targeted growth of 7.5 per cent.

Beijing cut interest rates in June and July, as well as cutting the amount of reserves banks must hold as a share of deposits, to boost lending as its economy slows from the breakneck 10 per cent a year growth pace seen over the past three decades.

While still outpacing the largely stagnant economies of the West, the Chinese economy has been cooling for the last seven quarters. But experts said the July-September period was likely to have marked the bottom point of the cycle.

Alistair Thornton, at IHS Global Insight, said: "Those fearing a hard landing will be able to sleep a little better tonight, but those positioned for a clear recovery may be disappointed."

The Chinese Premier Wen Jiabao described the growth as "relatively good", and said the government was confident of achieving its goal.

The figures come after the International Monetary Fund last week predicted China's economy would advance 7.8 per cent thanks to Beijing's previous efforts to spur it on.