China's gross domestic product grew 7.7% on a year-to-year basis in the first quarter, down from 7.9% in the fourth quarter of 2012 and lower than many economists forecast, reports the Wall Street Journal.
Government officials said the data reflected China's increasing emphasis on stable growth rather than the breakneck pace that has resulted in social and environmental woes and other imbalances.
"The new government has concentrated more on raising the quality of economic growth," says Sheng Laiyun, spokesman for China's National Bureau of Statistics. He added that "7.7% is not a low growth rate given the global and domestic situation, and it's good for companies' restructuring and industrial upgrading."
The economy showed further signs of slowing at the end of the quarter, according to the Journal. Industrial output growth decelerated to 8.9% year-on-year in March, down from 9.9% in February. Retail sales also disappointed, with growth at 12.6% year-on-year in March, suggesting cautious households are being slow to support the government's goal of raising domestic consumption.
"The slowdown in the first quarter is very remarkable," says Zhu Haibin, chief China economist at J.P. Morgan JPM -0.61% . "The weakness is quite broad-based on the domestic front."
In a sign that weakening economic recovery is affecting Chinese companies, Zoomlion Heavy Industry Science and Technology Co fell 8.9% in Hong Kong after the construction machinery manufacturer issued a profit warning for the first quarter. The company predicted a 60% to 80% on-year profit decline, citing a slow economic recovery.