China's GDP Slows to 9.6%

China's economy grew by 9.6% in the third quarter, indicating a slight deceleration in growth this year as the government's cooling measures appeared to have had some effect. 10/22/2010 8:23:09 AM

The numbers compared to 10.3% on the second quarter and 11.9% in the first, but at the same time consumer price index (CPI)inflation hit a two year high of 3.6% in September.

While the GDP figures will please the country's fiscal policy makers who have been trying to cool the pace of growth, the stubborn inflation numbers will be more of an issue.

The government had set a ceiling for inflation levels at the start of 2010 at 3%, and had predicted that inflation would fall well below that figure during the second half of the year.

CPI inflation stood at 3.5% in August, with most of the rise blamed on volatile food prices. The inflation hike will be of concern to market watchers who will expect Chinese growth to remain strong over the coming months.