China’s torrid growth eases after a series of rate hikes

China’s economic growth slowed slightly in the third quarter in a sign that tightening measures were taking effect, the government said Thursday. Economists said the peak of the latest boom might have passed.

The 11.5% expansion in output for the July-September period kept China on track to surpass Germany as the world’s third-largest economy by early 2008.

The growth figure, a decline from the 11.9% rate in the previous quarter, suggested that China’s rate of expansion had peaked, economists said. They said growth was expected to slow further but remain above 10% next year.

“The shift down in growth -- albeit mild -- has the economy heading in the right direction,” said analyst Daniel Melser of Moody’s Economy.com. “Growth had got to an unsustainably high level on the back of surging trade revenues. But this appears now to have slowed.”

Chinese leaders want fast growth to ease poverty. But they worry that the rapid expansion and an export boom are driving overspending on factories, real estate and other assets that could ignite a financial crisis.

Beijing has raised interest rates five times this year to curb double-digit investment growth, and economists expect one more hike before 2008.

In September, inflation eased slightly, with consumer prices up 6.2% over the same month last year, down from an 11-year high of 6.5% in August, the government said.

Authorities have blamed a recent increase in inflation on a shortage of food items, especially pork. They say it should ease as the government encourages farmers to raise more pigs.