'Booming' China set to land gently

CHINA is likely to take the steam out if its booming economy gradually, avoiding a crash, ratings agency Standard & Poor's said today in a significant vote of confidence in Beijing's ability to oversee a tricky transition.

The commentary comes as markets have taken fright at high-profile moves by Beijing to curb excessive economic growth. Some commentators said that clumsy policy-making risks a China crash that would knock growth in Asia and beyond.

The China fears were underlined today by the release of data that put inflation last month at 3.8%. It was the fastest rate in seven years, and well ahead of the State's official target of 3%.

'While a hard landing cannot be ruled out, a soft landing is more likely,' the influential agency told investors.

Ping Chew, head of sovereign ratings in emerging Asia for S&P, said Beijing was now much more skilled than a decade ago in engineering macroeconomic trends, and had been alert to signs of overheating since last year.

Growth in China has averaged - by official figures - 7% to 9% a year for much of the past decade.

China officials from Premier Wen Jiabao downward have signalled in the past month that a slowdown is desirable.