CHINA'S economy moderated faster than expected in the second quarter and, contrary to many estimates, the inflation rate also slowed down, due to a larger food supply last month.

A senior government official said China's economic growth has maneuvered deftly from the risk of overheating.

Economists, meanwhile, said moderation in consumer prices may be temporary and the country still has to be alert of inflation.

China's gross domestic product increased 10.3 percent year on year in the second quarter, compared with the surge of 11.9 percent in the first three months, the National Bureau of Statistics said yesterday.

The economic output in the first half thus rose 11.1 percent from a year earlier to 17.28 trillion yuan (US$2.55 trillion).

The bureau said the output of China's manufacturing sector jumped an annualized 13.2 percent to 8.6 trillion yuan. The services sector rose 9.6 percent to 7.4 trillion yuan and agriculture increased 3.6 percent to 1.3 trillion yuan.

"Generally speaking, China's economic growth is running stably on a fast track," said Sheng Laiyun, a spokesman of the statisticsbureau.

"Thanks to effective macroeconomic policies and measures, China managed such a growth rate which laid a solid foundation for the nation to reach its yearly target."

China aims to grow at 8 percent for the whole year.

Sheng said China will stick to a relatively easy fiscalpolicy and a proactive monetarypolicy the rest of the year to maintainstability and consistency.

However, the policy stance will be kept flexible to reflect changing economic situations, Sheng said.

Peng Wensheng, an economist at Barclays Capital, said he projects a continued policy-driven soft landing in China.

"We believe policy flexibility will support growth if the slowdown turns out to be sharper than policymakers expect or target," Peng said.

Some other economist said policymakers should still be cautious about inflation, although its advancing pace moderated last month.

Consumer Price Index, the main gauge of inflation, gained 2.9 percent on an annual basis in June, down from the jump of 3.1 percent in May.

Sheng attributed the moderation to a greater supply of food, including rice and vegetable after a good harvest in the spring, as well as the government's recent efforts to mop up excessive liquidity on the open market.

But Wang Qing, an economist at Morgan Stanley, still called the moderation "a surprise."

"We don't think the decline in vegetable prices would be sustainable," Wang said.

"We reaffirm our call for the headline year-on-year CPI inflation to peak in July and start to edge down over the rest of the year."

Retail sales in June advanced 18.3 percent from a year earlier to 1.23 trillion yuan, compared with an increase of 18.7 percent in May.

The GDP's moderation in the second quarter was largely led by slower growth in investment and industrial production.

China's fixed-asset investment in the first half expanded 25 percent year on year to 11.4 trillion yuan. The pace slowed from the expansion of 25.6 percent in the first three months, according to the statisticsbureau.

Industrial production rose13.7 percent in June, further down from the gain of 16.5 percent in May.

• economy [i´kɔnəmi] n.经济；机制；组织 (初中英语单词)
• contrary [´kɔntrəri] a.相反的 n.相反 (初中英语单词)
• meanwhile [´mi:n´wail] n.&ad.其间；同时 (初中英语单词)
• domestic [də´mestik] a.家庭的；本国的 (初中英语单词)
• bureau [´bjuərəu] n.局；编辑部；事务所 (初中英语单词)
• yesterday [´jestədi] n.&ad.昨天；前不久 (初中英语单词)
• output [´autput] n.产品；产品；计算结果 (初中英语单词)
• agriculture [´ægrikʌltʃə] n.农业；农事 (初中英语单词)
• running [´rʌniŋ] a.奔跑的；流动的 (初中英语单词)
• effective [i´fektiv] a.有效的；有力的 (初中英语单词)
• foundation [faun´deiʃən] n.建立；基金；地基 (初中英语单词)
• maintain [mein´tein] vt.维持；保持；继续 (初中英语单词)
• reflect [ri´flekt] v.反射；反响；表达 (初中英语单词)
• annual [´ænjuəl] a.每年的 n.年刊 (初中英语单词)
• vegetable [´vedʒtəbəl] a.&n.蔬菜(的)；植物 (初中英语单词)
• harvest [´hɑ:vist] n.&v.收获；收割 (初中英语单词)
• advanced [əd´vɑ:nst] a.先进的；高级的 (初中英语单词)
• investment [in´vestmənt] n.投资；(时间等)投入 (初中英语单词)
• industrial [in´dʌstriəl] a.工业的，产业的 (初中英语单词)
• senior [´si:niə] a.年长的 n.前辈 (高中英语单词)
• consumer [kən´sju:mə] n.消费者；用户 (高中英语单词)
• temporary [´tempərəri] a.暂时的 n.临时工 (高中英语单词)
• relatively [´relətivli] ad.比较地；相对地 (高中英语单词)
• excessive [ik´sesiv] a.过分的；极端的 (高中英语单词)
• expansion [ik´spænʃən] n.扩大；膨胀；发展 (高中英语单词)
• moderation [,mɔdə´reiʃən] n.适度；温和；节制 (英语四级单词)
• statistics [stə´tistiks] n.统计学；统计 (英语四级单词)
• yearly [´jiəli] a.每年的；一年间的 (英语四级单词)
• policy [´pɔlisi] n.政策；权谋；保险单 (英语四级单词)
• stability [stə´biliti] n.稳定；巩固；坚定 (英语四级单词)
• flexible [´fleksəbəl] a.灵活的，柔韧的 (英语四级单词)
• economist [i´kɔnəmist] n.经济学家；节俭的人 (英语四级单词)
• cautious [´kɔ:ʃəs] a.小心的；谨慎的 (英语四级单词)
• headline [´hedlain] n.(报纸的)标题 (英语四级单词)
• retail [´ri:teil, ri´teil] n.&a.&v.零售(商品的) (英语四级单词)
• deftly [´deftli] ad.灵巧地，敏捷地 (英语六级单词)
• speaking [´spi:kiŋ] n.说话 a.发言的 (英语六级单词)
• spokesman [´spəuksmən] n.发言人 (英语六级单词)
• fiscal [´fiskəl] a.财政的 (英语六级单词)
• monetary [´mʌnitəri] a.金融的；货币的 (英语六级单词)
• consistency [kən´sistənsi] n.坚韧；一致性 (英语六级单词)
• landing [´lændiŋ] n.登陆；降落；楼梯平台 (英语六级单词)