MercoPress. South Atlantic News Agency

Slight drop in Chinese growth .

Chinese authorities seem to have been successful in slowing down the country's overheated economic growth.
According to the latest data GDP growth during the second quarter reached 9,6%, down from 9,8% in the first quarter, and far below the expected 10,5% on an annual basis.

Among the measures imposed by Chinese authorities are limits on borrowing with the purpose of curbing investment and growth, particularly in the property and automobile industries. Financial officials so far have not touched interest rates which have remained unchanged for the last nine years, fearing government owned companies could not repay debts. Banks have been ordered to hold more funds on reserve and provide fewer loans.

Beijing has also tightened land use rules in an attempt to slow industrial developments.

However Chinese Central Bank officials early this month admitted that the flow of foreign investment remains strong in spite of government cooling efforts. Last June China attracted almost 8 billion US dollars in direct investment, 14% above the previous record of June 2003.

Compared to the first half of last year direct foreign investment in China increased 12%, totaling 33,9 billion US dollars, which has had an impact in the country's energy and raw materials supplies plus fears of inflation.

Last month the Organization of Economic Cooperation and Development reported that China overtook United States as the world's main recipient of foreign direct investment in 2003.

Foreign investment is attracted by China's cheap labor and fast growing economy. Chinese authorities on the other hand welcome foreign investment as a source of technical and managerial expertise.