China's economy slows amid rate hikes, inflation


BEIJING (AP) — China's rapid economic growth slowed slightly in the latest quarter but hit a robust 9.5 percent as the government tightened controls to cool surging inflation.

Economic growth was down from 9.7 percent in the previous quarter, the government reported Wednesday. Retail sales and factory output grew by double digits.

A government spokesman said Beijing would focus on fighting inflation that hit a three-year high of 6.4 percent in June despite slowing growth.

"We should stick to our effort to control prices," Sheng Laiyun, a spokesman for the National Bureau of Statistics, said at a news conference.

Beijing has hiked interest rates five times since October and tightened controls on lending and investment. That has prompted concern that the government might trigger an abrupt slowdown but most analysts say China can avoid that.

Premier Wen Jiabao, the country's top economic official, sounded a hawkish note Tuesday on inflation.

"Stabilizing prices remains the top priority for our macro-regulatory policies," Wen told a group of businesspeople, according to the official Xinhua News Agency.