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China growth to slow below 10 pct, inflation down

BEIJING - China's annual economic growth probably dipped below 10 percent in the third quarter, ending a run of 10 straight quarters in double digits, as the world's fourth-largest economy is hit by slowing global demand.

The median forecast of 15 economists polled by Reuters is for gross domestic product to have grown 9.7 percent from a year earlier from July through September, down from 10.1 percent in the second quarter.

Closures of factories and transport restrictions in and around Beijing during the Olympics likely disrupted business activity, compounding the effects of weakening demand in the country's main export markets, analysts said.

"Economic weakness is China's top concern. China's economy has been closely linked to the global economy through international trade and global inbound investments," said Donald Straszheim with Roth Capital Partners in Los Angeles.

"As a result of the global slowdown, we saw significantly slower export growth, investment growth, and industrial output growth during the third quarter," Straszheim said in a note.

Many economists expect the central bank to further relax monetary policy in coming months, following two recent cuts in interest rates and banks' required reserves.

A growing number of government researchers are calling for stronger measures to deal more urgently with a slowdown that they say has been too sharp.

Inflation figures are expected to offer authorities breathing space to take steps to support growth, which Beijing has said is the most significant contribution it can make to helping the global economy weather the financial crisis.

Consumer inflation probably eased to 4.7 percent in the year to September, the fifth straight monthly drop and down from a 12-year high of 8.7 percent in February, according to the median forecast of the poll.

The National Bureau of Statistics is scheduled to release third-quarter GDP and other September data on Tuesday, October 21 at 0200 GMT, but the timing could be subject to change.