Compiled by Caijing

(Caijing.com.cn) China's gross domestic product grew 6.1 percent year-on-year in the first quarter to 6.57 trillion yuan, the National Bureau of Statistics said, the weakest rise since 1992 when current record-keeping methods began, although the bureau called the outcome “better than expected” and released other indicators pointing to a possible recovery.

The NBS said industrial output data 5.1 percent for the quarter but accelerated toward the end of the period, with March growth up 8.3 percent year-on-year, against 3.8 percent in the two months to February. Meanwhile fixed-asset investment rose 28.8 percent year-on-year to 2.81 trillion yuan, up 4.2 percentage points from a year earlier.

Caijing’s chief economist Shen Minggao warns that without structural change of the economy, the recovery will only be temporary.

The pickup in activity reflects the massive influx of liquidity into the financial system as China sought to revive confidence in its economy. China’s banks released a record 4.6 trillion yuan in new loans during the quarter in support of government efforts to revive the economy, including an all-time high 1.9 trillion in March. After only three months, China is already poised to exceed its full-year new-loan target of 5 trillion yuan. JP Morgan Chase has said that actual lending for 2009 could be as much as 8 trillion.

First quarter GDP growth slowed from 6.8 percent in the fourth quarter and 9.0 percent in the third quarter. The government has an official 2009 target of 8 percent. 

“In the coming period, we should adhere to the decisions made by the central government on economic work, effectively implement the policies and measures issued, continuously improve the macro-control policies and make our efforts to realize a sound and fast growth of the national economy,” the bureau added.

Meanwhile, the bureau also released that China’s consumer price index fell 1.2 percent in March from a year earlier, and 0.6 percent in the first quarter.

The March decline is less severe than the fall of 1.6 percent in February, the first contraction in six years. But prices continued to fall despite the massive influx of new liquidity into the financial system during the first quarter, including 4.6 trillion yuan in new bank lending to support the government’s efforts to revive the economy.  

Urban CPI declined by 0.9 percent in the first quarter, while CPI was flat in rural areas, the NBS said in a statement on its website. 

Food prices rose by 0.5 percent in the first quarter, while transportation and communication prices fell 2.7 percent. Housing prices were down 1.1 percent, with a decline of 1.3 percent in March as developers continued to offer discounts in an attempt to move inventories.

The first quarter figures are coming off a high base, as inflation hit a 12-year high of 8.7 percent in February 2008, and 8.3 percent in March. Prices of fuel and raw materials, food and housing soared in the first quarter of last year, and price levels across all these measures have now fallen substantially.  

The producer price index (PPI) fell 4.6 percent in the first quarter, the NBS said, without giving the year-on-year data for March. It added that the PPI declined 0.3 percent in March compared with February.