(CNN) -- The worst financial crisis in decades is slowing China's industrial boom, officials said Monday, as gloomy news from other nations deepened worries about a global recession.
China's gross domestic product for the first nine months of 2008 increased by 9.9 percent, 2.3 percent lower than last year, China's State Council Information Office said.
"There are no signs of a definite recovery from the financial crisis," bureau spokesman Li Xiaochao said in a nationally televised news conference. "The growth rate has moderated," Li said.
The rate of expansion was the slowest since the second quarter of 2003, when the outbreak of Severe Acute Respiratory Syndrome, or SARS, cooled growth to 6.7 percent. Watch as China's economic growth slows
The figures, while still healthy, will fuel fears that worsening economic conditions around the world are hitting Asian growth.
"There was always this hope that China would pick up the slack for the U.S., but if China is seeing a slowdown, that could bash those hopes," Singapore-based investment analyst Nicole Sze of Bank Julius Baer & Co., which manages about $300 billion in assets, told The Associated Press.
A fall in the growth of exports due to the global economic slowdown was one of the reasons for the cooling of the Chinese economy.
China's economy is based largely on exports, and with people around the world buying less, they are buying fewer Chinese-made goods -- a trend likely to continue in the near future, economists say.
"We expect a further deceleration in industrial production growth as export oriented industries such as garments and toys grapple with external weakness, and heavy industries from steel to autos adapt to declining domestic demand," Jing Ulrich, chairwoman of China equities for JP Morgan Chase, said in a report to clients, according to AP.
Office spokesman Li Xiaochao said May's deadly earthquake in Sichuan province, which killed tens of thousands and left million homeless, and brutal winter snowstorms also took their toll on China's GDP.
The slowdown that is affecting economic fortunes in China was demonstrated last week as a massive Chinese factory that made toys for Mattel, Hasbro and other American companies shut down. Read more about factory closures
The Smart Union Group (Holdings) Ltd. factory, in the southern city of Dongguan, employed 7,000 people in mainland China and Hong Kong.
Chan Cheung-yau, chairman of toy and games subcommittee under the Chinese Manufacturers' Association of Hong Kong, said the outlook was gloomy for toy makers.
He predicted that thousands more factories would close in China next year. "The tightening credit market has made it more difficult for manufacturers to raise funds," he told AP. "It has created a huge cash flow problem."
CNN's Yuli Yang contributed to this report.
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