China's Economy Slows on Tighter Credit, Unwinding Stimulus

China's economy, the world's third-largest, is slowing as the government tightens credit and unwinds its stimulus package.

Growth slowed to 10.3 % in the second quarter from 11.9% in the first quarter, The Associated Press reported. This slowdown could hit global economic demand.

"The speed of economic growth is declining fast," economist Xing Ziqiang of China International Capital Corp. told the AP. "Countries that export raw materials to China will feel a bigger impact from declining investment."

China responded quickly to the global recession with a 4 trillion yuan ($586 billion) stimulus and increased bank lending. Now Chinese officials are concerned about a possible real-estate bubble and delinquent loans from state-owned banks.

Still, the Asian country should achieve its official growth target of 8% for the year.