Communist capitalism again
China's Growth Rate Cools, Stirring Hopes of Soft Landing
By REUTERS
BEIJING, July 16 (Reuters) - China's economy grew at a 9.6 percent pace in the April through June period, a weaker pace than expected, data showed Friday, suggesting that Beijing may be achieving a soft landing for the economy.
The number was a slackening from the 9.8 percent pace in the first quarter of the year. It was also below the 10.7 percent median expectation of eight economists. Relatively strong year-on- year growth had been expected, partly as a result of a rebound after the respiratory illness SARS curbed the economy last year.
Several economists said the new figures indicated that the worryingly fast growth of earlier quarters would gradually ease to sustainable rates without a destructive drop.
John Cairns, an analyst with IDEAglobal in Singapore, said, "It's been a very positive slowdown: not too aggressive and not too little." China's economy has grown at a torrid pace in the last decade as it evolves toward a version of market capitalism. [P6: emphasis added]
The nation's leaders have tried to cool such unsustainable growth without raising interest rates. Higher rates would make it harder for ailing state enterprises to repay their large debts.
Instead, China has turned to administrative measures like increasing bank reserve requirements and limiting investment in red-hot sectors like property and automobiles.
