China's economic growth slowed in the third quarter of the year, slipping into single digits for the first time in four years, as the impact of an international slowdown seeped into the world's fastest-expanding big economy.

The GDP growth rate slowed more sharply than expected to 9 per cent in the period from July to September — from 10.1 per cent in the previous quarter — as the impact of the global credit crisis and weakness in the domestic property sector was felt.

A spokesman for the National Bureau of Statistics, said: “The international financial market is slowing down noticeably and there are more uncertain and volatile factors in the international climate. All these factors are starting to release their negative impact on China's economy.”

Economists had expected growth to slow to 9.7 per cent, but statistics were always likely to be complicated by the Olympic Games, for which Beijing pulled out all the stops to curb pollution, leading to extensive factory closures and transport and visa restrictions, which hit output.

Industrial production slowed to 11.4 per cent in the year to September, the lowest rate since 2002, suggesting that the economy had lost momentum as the quarter went on.

Zhang Fan, an economist for Tebon Securities in Shanghai, said: “It's very obvious now that economic growth is slowing quickly, although some indicators, such as exports, are holding up due to lagging effects. Economic growth will continue to trend down.”

The Shanghai Composite, the main Chinese stock index, closed 2.25 per cent higher yesterday amid expectations that the figures would lead to further monetary easing. However, the price of copper, which is regarded as a key gauge of real economic activity, slipped as investors became more concerned about China's slowing growth and the rise in the dollar. The price of copper has fallen by more than 25 per cent this year.

The Chinese growth rate looks remarkably robust compared with other big economies, but policymakers know that they need to keep expansion at about 8 per cent to 9 per cent to meet their goal of reducing poverty while minimising job losses that could fuel social unrest. Only last week, the closure of a large toy factory in Guangdong province prompted hundreds of angry workers to besiege local government offices to demand their wages.

The property market, which accounts for about a quarter of fixed-asset investment, is weakening as tight credit and government curbs aimed at preventing the kinds of bubbles that have hit the British and American economies mount. Over the weekend the State Council, or cabinet, confirmed measures to pump up growth, including tax cuts and accelerated investment in infrastructure. At the top of the list was a plan to build many more miles of railway lines. Beijing has budgeted 1.2 trillion yuan (£102 billion) for railway investment in 2006 to 2010, more than four times the amount spent in the previous five years.

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