China's economy is slowing, but the motor is still chugging away

Production was 15.7% higher in October than in the same month a year earlier, the statistical office said. Growth has slowed from a 23.2% peak in February.

Economists have voiced concerns that China has been expanding too fast.

The government has echoed these fears, limiting investment and lending, and last month raising interest rates for the first time in nine years.

Pulled back

China is the world's seventh biggest economy and has been one of the fastest growing in recent years.

It's thirst for crude oil and commodities has been blamed for driving prices to record levels.

China has benefited as foreign companies shift manufacturing to take advantage of its cheap workforce, and as a pick up in global growth boosts demand for its products, such as raw steel.

During October, China's steel output rose by 25%, while production of goods such as dishwashers also surged.

The government, meanwhile, has been trying to tread a fine line, slowing growth but at the same time maintaining the economy's momentum.

Analysts have been heartened that the growth of Chinese gross domestic product (GDP) seems to be slowing gradually this year.

China's GDP rose 9.1% in the third quarter of 2004 , compared with 9.6% in the second, and 9.8% in the first.

A further interest increase now looks unlikely this year, though borrowing costs may still have to go higher in 2005, analysts said.

China raised its benchmark one-year lending rate to 5.58% at the end of October from 5.31%.