Rising interest rates and government-imposed lending curbs are cooling China's hot economy, economists say. At the same time, continued strong foreign investment, rising domestic demand and increasing exports will prevent a too-sharp descent. 

China's ability to slow its economy's growth rate without choking it "has taken people by surprise,'' said Carlin Doyle, a foreign exchange specialist with State Street Global Markets in London. 

That's particularly good news for Japanese steelmakers, American car manufacturers and Chilean copper producers, all of whom would suffer from a sharp drop in Chinese demand. 

China's imports jumped 37 percent to US$530 billion in the first 11 months last year, exceeding those of Japan. China, the world's largest consumer of steel, copper and cement, is the largest export market for South Korea, Singapore and the fourth biggest for the United States. 

China's US$1.4 trillion economy expanded 9.5 percent in the first nine months of last year after annual growth reached a seven-year high of 9.3 percent in 2003. 

There are signs the economy is cooling. Inflation slowed to a nine-month low in November, and industrial production rose at its slowest pace in 18 months. Investment in factories, buildings and other fixed assets rose 25 percent, less than half the 53 percent gain reported in the first two months of 2004. 

 (Source: Shenzhen Daily/Agencies)

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