MercoPress. South Atlantic News Agency

China's economy softly slowing, so far.

China's industrial production slowed during October, a sign which was greeted with relief by Beijing authorities who are trying to take steam from the seventh world economy but the fastest growing.

October industrial production was 15,7% above the same month a year ago, but has been slowing since the 23,2% peak of last February which forced the Chinese government to limit investment in certain areas, reduce lending and control the purchase of land for industrial projects.

Last month for the first time in nine years the Chinese Central Bank raised its benchmark one year lending rate to 5,58% from 5,31%.

China's nerve breaking growth pace is blamed for pushing oil and commodities prices to new records, and with a world economy picking up has seen the demand for its exports boost even more.

Beijing authorities are trapped in a desperate effort to try to slow the economy and avoid inflation which could have a dramatic impact on the fragile Chinese banking system and government managed companies but at the same time ensure the economy running at a healthy pace.

China's GDP expanded 9,1% in the third quarter of this year compared to 9,6% in the second and 9,8% in the first quarter. But inflation remains at a threatening 5%.

When justifying the first increase in nine years the Central Bank said that "raising interest rates is favourable for letting economic measure play a bigger role in resource allocation and macro economic controls", adding that it "will help to prevent excessive capital used by enterprises and ease the tight working capital at some enterprises and reduce capital flowing outside the banking system".

However China faces another challenge and that is the Yuan which remains pegged to the US dollar motivating recurrent claims from Washington for an end to a fixed currency regime.

United States exporters complain that the fixed Yuan makes Chinese goods artificially cheap swelling the US trade deficit. The latest US Commerce Department data on foreign trade further confirm the claim and so do China's accumulated international reserves of over 420 billion US dollars.