China GDP: Economy slows to 6.7% in first quarter

China's economy grew at an annual rate of 6.7% in the first quarter of the year, says the government.

It is the slowest quarterly growth in the Chinese economy in seven years, but in line with expectations and China's own growth targets.

In the final quarter of last year, the economy expanded by 6.8%.

Friday's figures confirm the slowing trend in the world's second largest economy.

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But there are pockets of growth. Investment in industrial assets and infrastructure registered a surprise jump by 10.7% in the three months to March, when compared to the same period last year.

Consumers also appear to be spending, with retail sales showing a robust 10.5% jump for March.

That fits Beijing's attempts in recent years to transform China from an export-led economy to a consumer-led one.

Image copyrightAFP

Image captionThe Chinese government is trying to engineer growth outside of the manufacturing industry

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Analysis: Stephen McDonell, BBC News, Beijing

To tell the truth China correspondents struggle with this country's economic statistics because we don't know how accurate they are and GDP figures are no exception.

Some provinces and companies are said to exaggerate their production figures to push themselves to the top of the pile but there are also those who are thought to under-estimate their performance so they can attract greater central government support.

For this reason there are economists who measure this country's financial health using electricity consumption figures instead. By this measure the world's second largest economy would still be growing but perhaps at not at such a rapid clip.

Asia's economic giant is attempting to make up for a loss in traditional production and exports by shifting to a model much more dominated by services and domestic consumption. It is in the process of sacking millions of workers and looking for somewhere else to place them.

This might be the correct thing to do in the long run - the government would argue that it is working to eventually deliver more sustainable growth - but, in the short term, what it means is more pain to come.

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Reforms ahead

China earned the label of being "the factory of the world" from decades of manufacturing activity, the main driver of its rapid economic growth.

But factory activity has drastically slowed, as foreign companies relocated to cheaper manufacturing bases around Southeast Asia.

Last year marked the slowest growth for the Chinese economy in 25 years, with 6.9% growth compared to 7.3% in 2014.

Image copyrightAFP

Image captionPremier Li Keqiang said China would face "more and tougher problems and challenges" in 2016

The government has set the growth target rate for 2016 at a lower range of 6.5%-7%.

Premier Li Keqiang told the annual meeting of parliament last month that China "will face more and tougher problems and challenges in its development this year, so we must be fully prepared to fight a difficult battle".

The National People's Congress (NPC) mapped out a new five-year plan for the economy and announced measures which included cutting high debt, streamlining state-owned enterprises, and reforming financial markets.