The economy was expected to grow 9.2 percent in the third quarter and 8.0-8.5 percent in the last three months of the year, Fan Jianping of the State Information Centre said in an interview with the overseas edition of the People's Daily.

Fan's forecast is in line with analyst expectations and supports a growing body of evidence that the Chinese economy is losing steam.

China's economy grew 11.9 percent in the first quarter before slowing to 10.3 percent in the April-June period after Beijing introduced a slew of measures designed to rein in property prices and avoid overheating.

Beijing has said a slowdown is good for the sustainable and long-term development of China as policymakers try to reduce the country's heavy reliance on exports and investment to drive growth.

"There is no need to be overly worried about the rate of economic expansion," said Fan, whose think tank is administered by the country's top economic planning body, the National Development and Reform Commission.

"We must ... take the initiative to slow economic growth to an appropriate and affordable level," said Fan, who is the director of the Centre's economic forecast department.

"This is more helpful for steady and healthy development than relying on investment in industries with overcapacity to blindly push for a high growth rate."

earlier related report
Japan world's second-largest economy in first half: govt
Tokyo (AFP) Aug 16, 2010 - Japan held onto its position as the world's second biggest economy ahead of surging China in the first half of 2010, a government official said Monday, after data showed growth sharply slowed in April-June.

On a nominal basis, Japan's gross domestic product was at 2.578 trillion dollars compared to China's 2.532 trillion dollars in the first half, the cabinet office said in a preliminary estimate.

However, the data pointed towards the looming prospect of China overtaking Japan as the world's second-largest economy, underlining its growing global clout after becoming the world's biggest exporter, auto market and steelmaker.

Japan's second quarter GDP was smaller than China's at 1.288 trillion dollars compared with 1.336 trillion dollars, according to the government.

Deflation and weak domestic demand have long burdened Japan, as consumers tend to put off purchases in the hope of further price falls, while global economic weakness has also hit the exports that have driven Japan's recovery.

"In the future, we expect the Japanese economy to fall into lull, as exports continue to weaken," said Hiroshi Watanabe, senior economist at Daiwa Research Institute.

"The economy is likely to slow through the early part of 2011."

In June, Japan's unemployment rate edged higher to 5.3 percent, while production of automobiles and electronic gadgets underwent a surprise slip, amid signs that an export-driven recovery may be stalling.

Shipments of cars, gadgets and components have been crucial in offsetting weaker demand at home, but concern is mounting that Japan may be hit by Beijing's efforts to cool China's economy, together with fragile eurozone and US demand.

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