China's economic growth stumbles in early 2013

China's rate of economic growth unexpectedly slipped in the first three months of 2013, according to official figures released today that show the country's GDP grew by 7.7 per cent in the first quarter.

Reduced factory output and less long-term investment spending were to blame for slump.

Analysts responded by cutting their GDP growth forecasts for 2013, with JP Morgan saying it now expects the nation's economy to increase by 7.8 per cent during the year rather than 8.2 per cent.

"Last week we saw data showing that Chinese imports jumped sharply in February which raised hopes that the Chinese economy was showing a significant recovery after its slowdown in recent quarters," said Michael Hewson, a market analyst with CMC Markets.

"These hopes look to be somewhat misplaced after both GDP and industrial production came in well below expectations though retail sales did improve slightly."

German engineering association VDMA said it was concerned by the weak Chinese market, adding that German exports to China dropped 25 per cent last year.