China´s GDP up 9.6% in H1, Q2 Growth Slows to 9.5%

China´s economic growth rate is decelerating, and many officials and analysts believe the moderation is healthy and will not lead to a hard landing.

Gross domestic product (GDP) rose by 9.5 percent year-on-year in the second quarter of 2011, tapering off slightly from the 9.7-percent growth posted in the first quarter and 9.8 percent in the fourth quarter of last year, the National Bureau of Statistics (NBS) said.

According to preliminary statistics, the country´s GDP reached 20.45 trillion yuan (3.15 trillion U.S. dollars) in the first six months, up 9.6 percent year-on-year. The growth deceleration was a desired outcome of macro regulation, which was also "normal" after the ending of some stimulus policies. The country´s economic development is now shifting to self-initiated growth from previous overheated expansion spurred by the economic stimulus.

Consumer price index (CPI), the main gauge of China´s inflation, rose 5.4 percent year-on-year in the first half of the year, accelerating from 5 percent in the first quarter and above the government´s target of 4 percent for this year.

To soak up liquidity, China´s central bank has raised the benchmark interest rates three times this year and hiked the reserve requirement ratio for banks six times. The interest rate increases will affect China´s economy in the near term, but in the long run the rises will boost the sustainable development of the economy.