Economic growth in China looks to be retracting slowly, if the latest quarter results are anything to go by. Government measures to curb inflation and slow down the property market were introduced earlier in the year after the first quarter economic growth was recorded at 11.9 percent, the highest it has been for three years.

The second quarter results showed that gross domestic product had grown by 10.3 percent, indicating to economists that the monetary tightening policy was having an effect. Inflation slowed to just 2.9 percent for the month of June, down from 3.1 percent for the month of May. For the months of May and June, production had reduced from 16.5 percent to 13.7 percent.

Government imposed restrictions on property purchases also looked to have an effect, with the average property price dropping by 0.1 percent in the month of June compared to the previous month. This is the first time that property prices have reduced since early 2009. Last year, the Chinese government encouraged record lending in the property market to help stimulate the economy. This had the desired effect and now, reigning in that growth is high on the agenda.

While a slowdown in China is seen as a necessary move to curb explosive gross domestic product growth, a major slowdown could affect worldwide commodity prices and put further pressure on the global financial recovery. Economic growth from China is expected to account for close to one third of the world’s economic growth for this year. Investors play a part in overinflating the fluctuations in the Chinese economy, labelling it as the world’s savour during the boom times and then blaming it for the global collapse when the outlook is not so positive.