China growth cooled to 10.4% in H1

Gross domestic product grew 10.4 per cent in the first half from a year earlier, the statistics bureau said today in Beijing. Growth was 10.6 per cent in the first quarter. consumer prices rose 7.1 per cent in June, slowing from 7.7 per cent in May.

China's leaders are under pressure to switch from fighting inflation to protecting exporters by slowing the yuan's appreciation after its 7.2 per cent increase against the dollar this year. The Ministry of Commerce has urged China's cabinet, the State Council, to rein in currency gains and increase some export rebates, a ministry official said July 14, speaking on condition of anonymity.

"Slowing economic growth, not rampant inflation, is emerging as the major concern for China's political leaders," said Glenn Maguire, chief Asia-Pacific economist at Societe Generale in Hong Kong. "We're not going to see the yuan appreciate at the same pace."

China's economy has grown an average 9.9 per cent a year since leader Deng Xiaoping ditched hardline Communist policies in favour of free-market reforms in 1978. The US economy grew 2.5 per cent in the first quarter.

China's growth is the fastest of the world's 20 biggest economies and is helping to sustain the global expansion this year as the US housing slump and credit-market turmoil threaten to send the world's biggest economy into a recession.