China has fuelled fears over a global recession by warning that the financial crisis is damaging its economic growth, as South Korea became the latest government to launch a banking rescue.

Data released today showed that China's gross domestic product expanded by 9% in the third quarter of 2008, down from 10.1% for the second quarter. Although this is still extremely healthy compared with other major economies, it is below analyst expectations - and the first time GDP growth has dipped below 10% in almost three years.

China's government blamed the lower growth on the world economic slowdown, which means less demand for Chinese exports.

"The growth rate of the world economy has slowed down noticeably. There are more uncertain and volatile factors in the international economic climate," said spokesman Li Xiaochao of the National Bureau of Statistics.

"All these factors have started to release their negative impact on China's economy."

After years of boom, there are signs that the Chinese economy may now be suffering from the fallout from the credit crunch. GDP growth has now slowed for the last five consecutive five quarters. The country is a huge consumer of raw materials, and last week Rio Tinto spooked the mining sector by warning that demand from China was slowing down.

Analysts believe that GDP growth will slow further in the fourth quarter, as the impact of the financial crisis bites.

"A gloomy outlook lies ahead after the third quarter, and concerns about the slowdown now outweigh concerns about inflation," said Chen Jinren, an analyst at Huatai Securities.

China's toymaking industry is under particular pressure, following a series of safety scares last year. Last week more than 6,000 employees lost their jobs when Smart Union, a major toy manufacturer in Dongguan, closed. It blamed a fall in demand from the US.

$100bn Korea move welcomed

Stockmarkets across Asia recorded gains overnight - after a week of volatility - as traders welcomed a $130bn bail-out (£74.32bn) of South Korea's banking sector.

Yesterday, the South Korea government announced it would take fresh action to support its banks; $30bn of fresh liquidity is on offer, plus loan guarantees totalling $100bn.

The move came just days after ratings agency Standard & Poor's put the country's five biggest banks on a ratings watch. S&P warned that they could struggle to repay foreign loans, as the South Korean won has fallen by a third against other currencies since January.

Finance minister Kang Man-soo told reporters in Seoul that the measures would "allay fears in the financial market," and "avoid placing domestic banks at a competitive disadvantage in terms of overseas funding".

The news sent the country's stockmarket, the Kospi, up by over 2% in late trading. Japan's Nikkei index closed 3.6% higher, recovering some of its recent losses.

But in a further sign that the crisis is far from over, ING has received a €10bn (£7.7bn) injection from the Dutch government to shore up its capital ratios. The bank denied it was in financial trouble, insisting that the recapitalising of UK and US banks meant it had to follow suit.