China economic growth slows in second quarter

Chinese economic growth has slowed in the second quarter of 2012 as demand from key trading partners Europe and the US dwindles.

Gross domestic product rose by 7.6 per cent in the April to June-period compared with the previous year, which is down from 8.1 per cent in the last three months.

Decision makers have been making efforts to curb this decline, with Beijing slashing growth targets for the whole of 2012 to 7.5 per cent.

China's central bank has also cut the amount of money banks must have in reserve in order to encourage lending, while it recently lowered the cost of borrowing twice in the space of a single month.

Premier Wen Jiabao said this week that encouraging investment is essential for stabilising growth in the country - which is the second-largest economy in the world.

His announcement has fuelled expectations that more state-driven stimulus measures will be implemented in the short-term by Wen's administration.

Many of Asia's biggest emerging economies are becoming more dependent on China as a trading partner, which is why these more gradual growth figures may incite concerns that a slowdown in China will have a significant impact on the international community - which is already struggling due to the debt crisis in the eurozone.

Taking into account China's domestic activity, recent reports paint a mixed picture.

Official figures show retail sales are up 13.7 per cent for the month of June, which is similar to May's 13.8 per cent, while bank loans increased in June to $144.4 billion (£93.5 billion).

At 08:50 BST, the Shanghai SSE Composite was up 0.4 per cent to 2185.3 points and the SSE SE 50 index advanced 0.4 per cent to 1679.4 points.

The Hong Kong Hang Seng made similar advances, rising 0.4 per cent to 2185.3 points and the Tokyo Nikkei 225 was stable at 8724.1 points.