China's economy has produced more mixed signals about its bumpy recovery, with an unexpectedly slower rate of growth jolting global markets and highlighting the difficulty facing its new leaders in pursuing deeper economic reforms.
The gross domestic product of the world's second-largest economy's grew 7.7 per cent in the first three months of the year - a weaker than expected result that lowered the Australian dollar and most mining stocks on Monday.
GDP had rebounded to 7.9 per cent growth in the final quarter of last year, marking the end of a two-year slowdown, and analysts had expected China to have an even stronger start to 2013. But sluggish industrial production and retail sales instead revealed an unexpected softness in its economy.
However, China's first-quarter economic data is notorious for throwing up red herrings due to the disruption of the Spring Festival (or Chinese New Year) holiday period.
"Overall, the Chinese economy had a smooth start in 2013," Premier Li Keqiang said a day before the data was released. "But many uncertainties, at home and abroad, still persist and make the overall situation quite complicated."
President Xi Jinping said while China's economy would continue to grow strongly, he warned the days of the "high-speed growth" of the past three decades were over. Beijing would focus on more sustainable economic expansion, he said.
China has continued to spend big on a network of airports, high-speed rail and highways, but has taken strong action as part of a three-year plan to prevent its property sector from overheating.
The softer retail sales have also been seen partly as a result of Mr Xi's public warnings against government officials overspending on luxury goods, amid rising anger at perceived rampant corruption.
While the data caught almost all analysts by surprise, most said it was no cause for concern yet.
"I don't think this is a turning point for slower growth. I think the recovery is probably delayed but ... is still coming," UBS economist Wang Tao said.
But Fitch Ratings expressed concerns last week about the long-term consequences for China's financial stability over the country's huge build-up in debt, particularly borrowing by local governments.
And economists at IHS Global said there was "plenty more downside risk out there than upside risk".
"We have lost confidence in a robust recovery," economists Ren Xianfang and Alistair Thornton said, adding that a repeat of last year's economic stimulus would prove disastrous in the long run.
"Another year of propped-up growth via state spending and a credit deluge would, we fear, push China dangerously close to proving Wen Jiabao correct - that the current economic model is 'unsustainable'."