Robust growth in China helped stock markets rally strongly Tuesday, January 17 as investor fears of an abrupt slowdown in the world’s second-largest economy were eased.

With Europe seemingly heading back into recession and the U.S. still to convince that it’s economy is improving, China is important to shore up the global economy as well as sentiment, especially at a time when many investors are openly fretting about a potentially-devastating Greek debt default that could prompt further turmoil in financial markets.

Government figures showed that the slowdown in Chinese growth in the final quarter of 2011 was not as big as had been feared. Though the drop to 8.9 per cent represented the lowest rate in two and a half years, the markets had been expecting a bigger decline to 8.7 per cent.

“Equity markets are giving a positive reception to the latest set of Chinese economic data which shows that the economy is managing to avoid a hard landing despite background concerns of local government debt and banks’ loan exposure to a previously overheated real estate sector,” said Neil MacKinnon, global macro strategist at VTB Capital.

Following Asia’s strong performance, Europe’s markets have traded strongly. Germany’s DAX was up 2 per cent at 6,341 while the CAC-40 in France rose 1.9 per cent to 3,288. The FTSE 100 index of leading British shares was 1.2 per cent higher at 5,723, according to AP.