BEIJING: China said on Friday its economy grew by 8.1 percent in the first three months of 2012, its slowest pace in nearly three years, as domestic demand fell and Europe's woes curbed business activity.
Gross domestic product grew by its slowest pace since the second quarter of 2009 in the three months to the end of March, the National Bureau of Statistics (NBS) said.
The figure marked the fifth consecutive quarterly slowdown for the world's second-largest economy, and NBS spokesman Sheng Laiyun said there was now "enormous" pressure on exports.
"The global situation in the first quarter is complex the pressure on exports growth is enormous," he told reporters.
Output from China's millions of factories and workshops rose 11.6 percent in the first three months of this year, compared with growth of 15.7 percent a year earlier.
The figure is likely to fuel concerns about China's vast manufacturing sector, which has been hurt by falling demand for Chinese products in crisis-hit Europe, the country's main exporter.
China's annual growth slowed to 9.2 percent last year from 10.4 percent in 2010, as turbulence in Europe and the United States hit the export-driven economy.
Analysts expect growth to rebound in the second half of this year as Europe's economic outlook brightens and China's loosening measures kick in, allowing greater credit access for small businesses.
"Q1 might turn out to be the weakest quarter for China in the current down cycle, as signs of stabilisation have already emerged on both domestic and external demand sides", said Xianfang Ren, economist with IHS Global Insight.
"China could easily overshoot the government's 7.5 percent growth target to deliver a soft-landing growth rate at over 8 percent this year."
China cut its economic growth target to 7.5 percent this year, from eight percent last year, in an official acknowledgement that the export-driven economy is slowing.
Over the past few months Beijing has pledged to "fine-tune" policy to prevent a hard landing for the economy, which could trigger widespread job losses and spark social unrest.
China's central bank in February cut the amount of cash banks must hold in reserve for the second time in three months as policymakers moved to increase lending and boost domestic consumption, and analysts expect further cuts in the coming months.
Retail sales, the main gauge of consumer spending, rose 14.8 percent in the first three months of 2012.
Urban fixed asset investments, a key measure of government spending on infrastructure, rose 20.9 percent in the first quarter of 2012 compared with a year earlier.
Beijing has also introduced a string of measures to help its struggling small businesses and pledged to support its export sector.
China's manufacturing activity fell to a four-month low in March according to HSBC, and imports slowed to 5.3 percent.
However, Beijing is not expected to loosen its grip on the housing sector which has seen prices more than double in many cities.
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