Economists polled by Reuters had forecast a growth rate of 6.3 per cent, but the slowdown underlines the impact of the global slump on China's trade-dependent economy.

Chinese exports fell 17 per cent in March, the fifth straight monthly decline but less severe than February's 25.7 per cent plunge.

Before the global economic crisis struck, China's GDP had experienced double-digit growth from 2003 to 2007.

'Better performance'

"The overall national economy showed positive changes, with better performance than expected"

Li Xiaochao,
National Bureau of Statistics

Despite the slower growth the government said conditions are better than expected.

"The national economy is confronted with the pressure of a slowdown," Li Xiaochao, the National Bureau of Statistics' spokesman, told reporters.

"The overall national economy showed positive changes, with better performance than expected."

Li said problems faced by the world's third-largest economy included a decline in exports, a drop in corporate profits and growing unemployment.

"We need to be vigilant, and react according to the changes taking place abroad. We need to be ready to react to the effect on our economy," he said.

"Good measures need to be extended, bad ones dropped. It is better to expect the worst and to be ready to react accordingly."

China registered nine per cent growth throughout 2008, and the slower growth figure comes amid concerns that the country this year will experience its slowest economic expansion in 19 years.

Cash injection

The statistics bureau said urban fixed asset investments rose 28.6 per cent in the first quarter, while in March alone the increase was 30.3 per cent year-on-year.

The figure is a measure of government spending on infrastructure, which received a massive boost in November with a four-trillion-yuan ($580bn) package aimed at warding off the effects of the global economic crisis.

The statistics bureau reported that consumer spending rose 15 per cent in the first quarter while consumer prices, China's main gauge of inflation, fell by 1.2 per cent in March.

The data also showed China's industrial output expanding 5.1 per cent in the first quarter of 2009 from a year earlier, while in March alone it rose by 8.3 per cent.

Industrial output, which illustrates activity in the country's millions of factories and workshops, rose 12.9 per cent in 2008.