China's gross domestic product grew 8.1% in the January-to-March period from the prior year according to the National Bureau of Statistics - slower than 8.9% in the fourth quarter and the median 8.3% forecast by economists.
The first-quarter growth was the slowest on a year-on-year basis since the 6.6% in the first quarter of 2009. It was also disappointing on a quarter-on-quarter basis, slowing to 1.8% compared with the fourth quarter's 2%.
Chinese Premier Wen Jiabao said yesterday China faced rising inflation risks amid the growth headwinds, adding that Beijing would continue to improve and fine-tune macroeconomic controls and policy to deal with the challenges.
In sharp contrast to the quarterly GDP reading, data for industrial production, retail sales and bank lending showed momentum picking up in March. Chinese production of steel, cement and automobiles - which had recently triggered concern of an economic hard landing - accelerated last month. Industrial production rose 11.9% in March from a year earlier, and topping the 11.6% median forecast. Retail sales rose 15.2% from a year earlier, also up 0.5% and beating the forecast gain of 15.1%.
Meanwhile, an unexpected surge in new loans last month showed the ruling Communist Party was trying to avoid a deeper growth slide. The People's Bank of China said on Thursday that new loans made by the country's banks trumped forecasts to spike to 1.01 trillion yuan last month from 710.7 billion yuan in February.
One area where there was little to cheer about was the property sector. Investment growth in the first quarter was the slowest since the government started its property market tightening campaign two years ago and home sales continued to shrink.
