China's economic growth slows

China's economic growth slows

10 largest economies

While that remains a remarkably fast pace compared to the United States, it's slow by Chinese standards.

Though the U.S. economy is still the largest in the world, it grew at a mere 1.8% in the third quarter (fourth quarter figures haven't been released yet).

China, the world's second largest economy, has grown at an average annual rate of about 10% for the last 30 years.

Last year, taming rapidly rising prices was one of the Chinese government's top priorities. Officials tightened credit in the country's financial system, and tried to take some of the steam out of a domestic housing boom.

Now government efforts to cool a rapidly growing real estate market seem to be working. Residential property prices in 100 major Chinese cities started cooling in September.

But China's economic engine has also begun to lose momentum, as the country's exporters are being hit by weaker demand amid slowing world economic growth.

Now that inflation seems to be under control, the government is shifting its focus to promoting sustainable growth.

World markets welcomed the economic data Tuesday, since the report wasn't quite as severe as analysts predicted. The Shanghai Composite (SHCOMP) soared 4.2%, while the Hang Seng (HSI) in Hong Kong gained 3.2% and Japan's Nikkei (N225) climbed 1.1%.

European stocks also rose in morning trading. Britain's FTSE 100 (UKX) added 0.8%, the DAX (DAX) in Germany gained 1.8% and France's CAC 40 (CAC40) climbed 1.4%. 

First Published: January 16, 2012: 9:50 PM ET