Chinese tech stocks have been on the downswing of late as cooling Chinese inflation has signaled weaker economic growth in the nation. China's economic growth rate may continue to slow, bottoming out in the first or second quarter while recovering moderately in the third or fourth quarter, the state-run China Securities Journal reported earlier this week. The Bedford Report examines the outlook for companies in China's Internet Sector and provides stock research on Baidu, Inc. (NASDAQ: BIDU) and E-Commerce China Dangdang Inc. (NYSE: DANG). Access to the full company reports can be found at:

China's economic growth rate is likely to be around 9.2% this year and slow to a range of 8.5% to 8.8% next year, Ba Shusong, a deputy director-general of the Financial Research Department of the Development Research Center, said.

In the first half of 2011, China's internet population added 27 million Internet users over the last six months, bringing the total number to 485 million, according to official statistics. According to China Internet Network Information Center (CNNIC), the country's internet growth rate is showing "pronounced" signs of slowing going forward.

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China's total Internet penetration is a mere 36.2 percent -- far behind the U.S., which is at 77.3 percent, according to Internet World Stats. The low Internet penetration in China leaves 815 million people who do not use the Internet, according to the CNNIC. CNNIC says the deceleration in the growth rate of total users mainly reflected the weak online skills of China's huge population of rural and older people, most of whom don't know how to use a computer.