The price of oil fell to below $40 this week and closed the day at $40.32 representing another low of this year and down to levels seen back in 2004.

Opec have been cutting production to help maintain the barrel price and has again agreed to cut this again by a record 2.2 million barrels per day. However, despite these cuts and to-date this is 4.2 million barrels per pay, the price of oil has continued its fall, as inventories of oil build up in America and other major oil consumers around the globe.

Merrill Lynch predicted that, should China go into recession, the price could fall to around $25 per barrel, which I must admit seems so low, but then I though that price had bottomed out at around $55 per barrel and then at just over $40. So it is any ones guess where the bottom might be to this fall in oil prices at a time where consumer confidence in world economies is at an all time low.

China’s economic growth rate has fallen for the third quarter in succession, amid fears that the economy could be heading for a severe downturn.

The National Bureau of Statistics said the economy had grown at a rate of 9% in the three months to September – down from 10.1% over the previous quarter.

Spokesman Li Xiaochao said the impact of the global financial crisis had far exceeded the government’s expectations.

Meanwhile shares rose in Asia. Japan’s Nikkei index ended the day up 3.59%.

Share values also rose in Hong Kong, Australia, and South Korea.

No signs of recovery’

The third quarter growth rate announced on Monday marked a significant fall from the 10.4% growth of the first half of 2008, and the 12.2% growth seen in the first three quarters of 2007.

“There are no signs of a definite recovery from the financial crisis,” statistics bureau spokesman Li Xiaochao told a news conference.

“Export growth is slowing, and some companies are running into trouble” Li Xiaochao National Bureau of Statistics

“The growth rate of the world economy has slowed down noticeably. There are more uncertain and volatile factors in the international economic climate,” he said. “All these factors have started to release their negative impact on China’s economy.”

Correspondents say indicators from steel prices to housing sales suggest a severe economic slowdown could be in prospect.

Chinese factories are reporting that export orders are down sharply. Last week, the government said that half the country’s toymakers had gone out of business.

Mr Li said the government had initiated timely measures to deal with the economic slowdown and cushion the impact from the global credit crisis, including falling exports and a restricted credit supply.

These included changing its focus from preventing the overheating of the economy and preventing structural inflation to the “preserving growth” and “controlling” inflation, he added.

Officials said over the weekend that the government was preparing to announce tax cuts and increased infrastructure investment. Curbs on the housing market in certain areas may also be relaxed.

The main stock index in the city of Shanghai is sharply down

The People’s Bank of China has cut interest rates twice and reduced banks’ required reserves since mid-September. A third interest rate cut is expected later this year.

The BBC’s Quentin Sommerville in Shanghai says that although the government it is doing what it can to boost demand at home, China’s new middle class is already feeling the pinch.

The stock market is sharply down, so too are house prices, while car sales have slowed dramatically. Consumers are cutting down on spending as they believe there are tougher times ahead, he says.

The National Bureau of Statistics also announced on Monday that consumer price inflation had cooled to a 15-month low of 4.6% in September. In February, inflation had hit a 12-year-peak of 8.7%.

Mr Li said the slowdown in inflation showed that the policies initiated by regulators to control it had been effective.

News reported by The BBC

China’s central bank has cut interest rates for the first time in six years amid growing turmoil in global financial markets.

The key lending rate will fall to 7.2% from 7.47% with effect from Tuesday, while the amount of cash most banks must keep in reserve was cut by 1%.

The surprise move comes as US bank Lehman Brothers files for creditor protection and world shares tumble.

With inflation cooling, China is keen to maintain stable economic growth.

“We all knew that there would be monetary policy relaxation in China, but we didn’t expect the move would be so quick,” said Gao Huiqing, an economist at the State Information Centre, a government think tank.

All but the biggest banks will be allowed to reduce the proportion of deposits held in reserve from 25 September – the first time the central bank has cut reserve requirements since November 1999.

Pro-growth stance

Recent figures have shown that Chinese economic growth has slowed this year as a result of constrained demand for its goods from overseas markets.

The economy grew at an annual rate of 10.1% in the three months to June, down from 10.6% in the previous quarter and below the 11.9% seen for the whole of 2007.

Rising food prices helped to crimp growth as did the increasing cost of credit with six increases in interest rates last year aimed at bringing spiralling inflation under control.

Grain and pork shortages had pushed consumer prices to 11-year highs earlier this year, but government measures have helped to bring this figure down to 4.9% in August – a 14-month low.

This enabled Beijing to cut interest rates to boost consumer spending and offset a decline in demand for exports as the global economy slows.

News reported by The BBC

Chinese brewer Tsingtao has reported that half-year profits jumped 42% helped by added publicity due to its 2008 Beijing Olympics sponsorship.

The firm, which is 27% owned by US beer giant Anheuser Busch, said net income rose to 381.13m yuan ($55.4m; £29.8m).

Under pressure from higher raw material and labour costs, Tsingtao said it was forced to raise the prices of some of its brands during the period.

Brewers worldwide are suffering higher barley, hops and packaging costs.

China’s beer market is the largest in the world by consumption, but it is a fragmented industry and competition from domestic and Western brewers is rife.

Tsingtao is China’s second-largest brewer, behind China Resources Snow Breweries, which is co-owned by London-based SABMiller and owns the best-selling Snow brand.

It is hoping to tackle Snow’s dominance through its Olympic campaign, on which it spent 1.6bn yuan in the first six months of 2008 – a 20.5% increase on last year.

News reported by The BBC