First quarter 'sound' despite slower growth

Slower than expected growth in the first quarter will not prevent China from attaining its annual GDP target, a government spokesman said on Monday.

The economy registered growth of 7.7 percent year-on-year in the first three months, down from 7.9 percent in the fourth quarter of 2012.

Sheng Laiyun, spokesman for the National Bureau of Statistics, said that the first quarter was a "sound and steady" start to the year, and the nation's economic fundamentals have remained strong.

"We are optimistic," he said, about achieving the annual GDP growth target of 7.5 percent because the job market has continued generating new opportunities and there has been a steady increase in incomes.

The World Bank lowered its growth forecast for the world's second-largest economy on Monday to 8.3 percent in 2013, slightly lower than its previous prediction of 8.4 percent.

JPMorgan also lowered its annual growth prediction to 7.8 percent from 8.2 percent.

"China's economy will show a moderate pace of growth in 2013, although the economy will continue the long-term downward trend in its growth potential," said Zhu Haibin, chief China economist with JPMorgan.

In the first quarter, industrial output rose 9.5 percent, 2.1 percentage points lower than the growth a year earlier, and half a percentage point lower than the whole of 2012.

Fixed-asset investment grew 20.9 percent, the same as in the first quarter of last year. It contributed 2.3 percentage points out of the 7.7 percent first quarter growth, down from 3.9 percentage points of the 7.8 percent growth in 2012.

Retail sales of consumer goods rose 12.4 percent, down from 14.8 percent growth a year earlier. About 55.5 percent of the economic growth was from consumption, the NBS said.

The benchmark Shanghai Composite Index dropped for the third consecutive day, down 1.13 percent on Monday to close at 2181.94, the lowest since Dec 25.

"Weak indigenous impetus, especially sluggish industrial production, was the main force that restrained economic recovery," said Tang Jianwei, a senior macroeconomic analyst with the Bank of Communications.

Investment expansion in the manufacturing sector was 18.7 percent year-on-year, reaching the lowest level in a decade, Tang said.

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