The Chinese Government appear to be successfully slowing the economy and the hot housing sector without too much danger of a crunch.

At the same time inflation has eased in the year to June on the consumer and producer basis, another positive for the economy's progress in the second half of 2010.

It's an object lesson to all the gloomsters who have been telling us that China will crash.

China's data came the same day as the Bank of Japan (see below) lifted the current year's growth rate, but cut the 2012 estimate, and after the US Fed made it clear that it saw American growth slowing, inflation falling and unemployment remaining higher for longer.

The fall in Chinese growth and production vindicated the belief, shown in the various manufacturing and service sector surveys this month, that global growth had 'rolled over' and was now trending lower.

And that includes Australia where the Federal Government trimmed its growth estimates for 20110 and 2011.

According to the Organisation for Economic Co-Operation and Development, China will account for a third of global economic growth this year.

And the way growth is slowing, it could account for a similar amount in 2011.

In China first-half GDP growth came in at 11.1%, slower than the 11.9% growth recorded in the first quarter.

GDP fell to an annual rate of 10.3% in the June quarter.

That was less than market forecasts of 10.5% growth and a 10.6% estimate by several leading Chinese economists this week.

A better indicator of the extent of the slowdown was the fall in industrial production in June to an annual rate of growth of 13.7%. That is a sharp decline from the 19.6% in the first quarter.

Industrial production grew an annual 17.6% in the first six months of this year

The country's consumer price index for June rose at an annual rate of 2.9%, down from the 3.1% in the year to May.

The producer price index jumped 6.4% from June of 2009, but that too was down on the 7.1% annual rate in the year to May.

Both were lower than expectations for rises of 3.3% and 6.8%.

In May, China's consumer and producer prices rose 3.1% and 7.1%, respectively, while its retail sales and industrial production expanded 18.7% and 16.5%, respectively.

So far, the government has cooled the economy and especially housing by cutting bank loans by 22 % to 7.5 trillion Yuan, raising lenders' reserve requirements twice and selling bills to soak up cash.

Home ownership has been made tougher to attain, second and third homes have been outlawed or made too expensive for most people to buy.

The annual growth in house prices slowed to 11.4% in the year to June, down from the 12.4% in May and the peak 12.8% annual rate in April.

Another sign of the economic easing was to be found in steel production last month.

According to the National Statistics Bureau, crude steel production in June was 53.77 million tonnes, down 4.2% from the 56.14 million tonnes in May (which was the highest level of output for more than 18 months).

Iron ore imports fell 9.1% in June from May to around 47.2 million tonnes and are now down 25% from the more than 62 million tonnes imported last December.

Chinese exports in June rose 43.9% from a year earlier and imports rose 34.1%.

That left China with a trade surplus of $US20.0 billion, the largest in nine months.

China publishes growth figures on a year-on-year basis but does not release a sequential, seasonally-adjusted growth figure which would allow a more accurate picture of economic activity.

And in Japan the country's central bank has lifted its growth estimate for the current financial year that ends on March 31, 1022 to 2.6% from 1.8%, but trimmed the 2012 year estimate to 1.9% from 2.0%.

The upshot is that whereas the Bank of Japan saw gradually rising growth over the next two years, it now sees growth peaking this year and then tending lower.

The bank says the Government's fiscal stimulus is losing its impact and overseas demand loses is slowing, especially in Japan's main markets of China and the US.

The bank of Japan left its main interest rate steady on 0.1%.