The Dragon slows

China's gross domestic product grew at an annual rate of 7.6 per cent in the April to June period, down sharply from the 9.5 per cent a year earlier, according to government figures released on Friday. The second-quarter growth rate was half a point below the 8.1 per cent for the first three months of this year.
For the first half of the year, the economy grew 7.8 per cent.
The decline is partly caused by a weak global economy. Europe, which until this year was China's biggest trading partner, is in recession, while the United States economy remains weak. Even developing countries like India and Brazil have weakened considerably.
But part of the downturn is self-induced -an effort by China to wean itself off decades of inefficient growth caused by heavy investment in sometimes dubious projects.
Chinese officials say this reflects China's maturing economy.

The rate was the lowest since the 2008-2009 global recession, when growth dipped to 6.6 per cent in early 2009 before a huge government stimulus package provided double-digit economic growth.
Now, however, that stimulus has worn off and economists are divided over China’s prospects.
Signs abound of weakness. Housing prices are officially falling for the first time since 2009, albeit only by 1.2 per cent for May.

Retail sales are up 13.8 per cent, which is slightly down over previous months but not out of line based on historic figures. Exports have also increased to most parts of the world, except struggling Europe.
The challenge, economists say, will be for Chinese companies to adapt to slower growth. Companies in construction and energy industries will face tougher times, but those aimed at consumers could profit. 

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