China's economic expansion eased slightly in the third quarter to its slowest pace since the second quarter of 2009 as the world's growth engine strained against tight monetary policy at home and softening demand abroad.
Gross domestic product rose 9.1 percent in the third quarter from a year ago, moderating from the second quarter's 9.5 percent. It was slightly below market forecasts for a 9.2 percent expansion.
The data shows China is not impervious to the fallout from the euro zone's debt crisis and highlighted the risks that the world's second-biggest economy faces if its top trading partner, Europe, does not resolve festering debt problems.
But the relatively moderate easing of growth does not signal a shift in monetary policy in response, Connie Tse, economist at consultancy Forecast in Singapore, said.
Based on the view that China should have acted more aggressively in the beginning of the year with its interest rate policies and that price pressures are still a problem, absent a hard-landing scenario, we do not see scope for interest rate cuts in the near-future, Tse said.
Shares in resource-rich Australia <.AXJO> extended losses on the day to as much as 2 percent after the GDP data, with major miners who supply China sliding between 3 percent and 9 percent.
Fixed asset investment -- the core driver of China's rampant economic growth -- continued at a robust pace, chalking up growth of 24.9 percent in the January-to-September period, slightly ahead of forecasts of 24.8 percent.
Trade data out last week showed annual growth in Chinese exports to Europe more than halved from August, with the year-on-year rise in China's overall exports at a seven-month low.
China's economy is facing increasing uncertainty at home and abroad, China's Statistics Bureau said in a statement alongside the data release. It called for the maintenance of stable economic policies.
Slower growth could help some of that stabilization process as it implies some softening of price pressures for inflation-wary officials in Beijing.
China's inflation, albeit easing, eased to 6.1 percent in September, close to near three-year highs of 6.5 percent in July and well over Beijing's 2011 target of 4 percent.
To combat rising prices and prevent them from stoking social unrest, Beijing raised interest rates five times and banks' reserve requirements nine times in the past year.
However, the darkening world economic outlook has forced Beijing to stand pat on policy since July, with some analysts betting that authorities may even loosen policy to support growth if needed.
To prop up the economy, analysts say China may opt to slightly loosen credit controls or even cut banks' reserve requirements from record highs to encourage more lending to firms, especially the smaller ones.
China has over tightened its policy since May. That has increased the risks of a hard landing, as global economic growth also slowed since the second quarter, said Dong Xian'An, chief economist at Peking First Advisory.
That risk of sharp economic slowdown in China still exists. We expect Chinese economic growth to slow down to around 8.6 percent in the fourth quarter, Dong added.
But few analysts expect China to cut rates anytime soon given stubborn price pressures.
I don't think they will make any move (in rates) in the near term. Then maybe after a few quarters, toward the middle of next year, if everything is OK, I think they will continue to hike interest rates, not cut interest rates, said Ting Lu, economist at Bank of America-Merrill Lynch in Hong Kong.
(Editing by Ken Wills)