China economy weakens further, most Asia markets retreat

China's economy grew at its weakest pace since the global financial crisis in the third quarter, official data showed Monday, fuelling speculation Beijing will unveil fresh stimulus measures.

While the figures were slightly better than expected, early gains in Asian equities dissipated although emerging market currencies pared losses on growing expectations a US interest rate rise will be put back to next year.

China's National Bureau of Statistics (NBS) said the economy grew 6.9 percent in July-September, the weakest since 2009 at the height of the global recession but better than the 6.8 percent tipped by analysts in an AFP survey.

The result is the first official confirmation of investors' fears over growth in the world's number two economy and follows a string of weak indicators including on trade and manufacturing activity.

The economy is forecast to grow this year at a slower pace than last year's 7.3 percent, which was the worst annual rate in almost a quarter of a century.

An NBS spokesman described the decline as a "slight slowdown" but said the economy was still running within a "proper range". Beijing has set a target of "around seven percent" for growth this year.

As the world's biggest trader in goods and a giant market in itself, China is a key driver of the global economy, and stock exchanges around the world have been pummelled in July-September by concerns over its future.

Global indices were sent into freefall in August -- wiping trillions of dollars off valuations -- when Beijing announced a shock devaluation of its yuan currency, which fuelled fears  about the economy and leaders' grip on the crisis.

However, investors took some positives from Monday's report, hoping the government will further loosen monetary policy after five interest rate cuts since November.