Beijing is unlikely to tighten policies further in the near term although GDP slide
The mainland economy grew by 10.3 percent in the second quarter, slower than market expectations, while inflationary pressure eased in June.

The data signaled that Beijing is unlikely to tighten policies further in the near term.

Economists expect growth to keep easing in the second half. They cut their full-year gross domestic product forecast to around 10 percent.

Most said any interest rate hike is likely to occur in the fourth quarter at the earliest.

China's GDP growth in the past three months dropped sharply from 11.9 percent in the first quarter, mainly due to a slowdown in fixed asset investments and a sharp fall in industrial production.

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However, first-half GDP at 11.1 percent is still healthy, said National Bureau of Statistics spokesman Sheng Laiyun.

"A moderate slowdown is good for the country to avoid overheating," he said, adding that tightening measures and the low base effect from last year contributed to the easing of GDP growth.

Consumer price inflation, meanwhile, slowed to 2.9 percent in June from 3.1 percent in May, helping to keep the consumer price index at 2.6 percent for the first half.

The central government will pursue a moderate monetary policy in the second half in a bid to keep full-year CPI growth below 3 percent, Sheng said.

Tightening measures in the property market will not affect economic growth, he added.

Credit Suisse Asia Pacific economist Tao Dong agreed, adding a 15 to 20 percent fall in home prices will not cause a crash, as prices rose as much as 40 percent in 2009 from a year previously.

Tao estimated fixed asset investments and industrial production will slow down further as there are concerns about the property sector and the possibility of a "double-dip" global recession.

CITIC Bank International chief China economist Liao Qun does not expect Beijing to introduce tightening initiatives in the third quarter.

He revised his 2010 GDP forecast to 10.1 percent from 10.3 percent previously, while the Royal Bank of Scotland cut its prediction to 10 percent from 11 percent. Liao said big adjustments in the property sector pose the biggest threat to economic growth.