China’s red-hot economy is officially slowing. Latest data put annual GDP growth at 9.0% in Q3, down from 10.1% in the previous quarter. Most analysts expect further economic easing and accelerated capital flight in Q4. But Jason Simpkins says a correction will actually benefit the Chinese economy, which had been running the risk of overheating. And ’slower’ growth of around 8% next year will still be the envy of the developed world.

The milk industry in China is in shambles because at least three of the country’s major producers have been watering down their products. That’s not very scandalous. In fact, we have a name for that milk in the U.S. It’s called skim. But these Chinese producers were using a toxic chemical to mask their watery dairy products.

Andrew Gordon says there is potential for a resurgence in Chinese energy demand as factories get back to work following the Olympics. But Stephanie Grimmett in Today’s Financial News says China stockpiled too much gas and diesel before the games and will not be importing fuel in the next month. This should keep crude oil prices subdued. It also creates a profit opportunity in oil refinery stocks…

Fleet Street Letter’s Ben Traynor says China’s domestic market will insulate the economy from a fall in demand for its exports. Strong local consumer and investor confidence undermine the theory that China will be shot down by the global downturn. Ben says this is good news for Western investors looking for growth while their local economies stagnate.

Even the world’s fastest growing large economy is spooked by the global downturn.

Even with the arrival of the much-hyped Beijing Olympics, the Chinese stock market remains on a serious downer.

Yesterday, China’s benchmark Shanghai Composite Index dropped 5.2 percent after economic data revealed wholesale price inflation jumped to its highest level in 12 years in July.

However, Taipan Daily editor Justice Litle says China’s long-term outlook remains strong – and some China plays look more favorable than they have in years. Here are Justice’s six reasons why the China bears are wrong…

The 29th Olympic Games opened today. They are expected to cost China a staggering $40 billion. 

Bill Patalon in Money Morning says the games are a reminder that every investor needs a China strategy. Despite the country’s benchmark Shanghai exchange being in “double bear” territory, China’s economy is white hot right now, and it’s expected to grow by double digits this year.

The bottom line, says Bill, is that ignoring China is ignoring the world’s second-most-important economy – not a way to profit in the long term. Consider the following facts:

ConocoPhillips Pumps Profit; Pepsi Sales Improve; Amazon Profit Doubles; Oil Continues to Slide; Northwest’s Almost Profit; Beige Book’s Got the Blues; China’s Google Scores on Olympic Traffic; Chrysler Cuts Jobs.

If you think that lack of financing is the only thing holding China back from consuming, consuming, consuming like we Westerners do, then prepare for a shock, as from Latimes.com we get the report that “China’s Shoppers Stock Up On Cards” by Catherine Jiang.

High oil prices, a steep drop in consumer confidence, declining home values and a weak dollar conspired to drive the Dow Jones Industrial Average to its lowest point in two years, and made for the benchmark index’s worst June since the Great Depression.

The Dow lost 4.2% last week and closed at 11,346.51 – its lowest level since September 2006. All totaled, the Dow plunged 9.5% in June – its worst mid-year performance since the 18% drop in the 1930s.

Down 20% from its Oct. 9 high of 14,165, the Dow officially entered into a bear market.