China's Growth Slumps to 3-Year Low

Hopes that a booming Chinese economy might give the moribund West a boost have taken a hit with the release of figures showing the country's growth is at its slowest since the financial crisis. The Chinese economy has slowed for the sixth quarter in a row, with last quarter's 7.6% GDP growth rate representing a three-year low. While 7.6% would sound pretty sweet to most Western countries, the figure is just one of many signs that the Chinese economy is struggling—export growth in the first half of 2012 is down steeply from a year earlier and the People's Bank of China has cut interest rates for the second month in a row in its first reductions since 2008.

China is also embroiled in a fierce crackdown on real estate speculation, further reducing demand. Most analysts expect the Chinese economy to rebound later this year, although the situation may be worse than official figures show: Electricity consumption has slowed much faster than growth in official GDP, leading some to suspect that the figures are being skewed ahead of the once-in-a-decade leadership transition this fall, Bloomberg notes. Still, "China's economy survived a period of much slower growth in 2009, where there were massive layoffs, without social unrest or serious problems," an analyst at CLSA tells the Guardian. (More China stories.)