China’s economy grew more slowly than usual in the first quarter, and joblessness increased, but fairly strong investment and consumer spending helped prevent falling exports from dragging down economic output even further, the government said Thursday.
China’s economic output was 6.1 percent larger in the first quarter of this year than a year earlier, the National Bureau of Statistics said, but a range of statistics showed that March was better than January or February.
China’s annual growth rate appeared slow in the first quarter after the 6.8 percent rate in the fourth quarter of 2008, partly because it was being compared with the economy’s formidable output in the first quarter of last year. Then, many factories were operating with extensive overtime, and the rate of inflation was approaching double digits despite considerable efforts by Chinese officials to prevent the economy from overheating.
Still, 6.1 percent is substantially below the double-digit growth rates China has frequently posted this decade. China’s leaders have called for 8 percent growth just to create enough jobs for school graduates and for the tens of millions of rural migrants pouring into the country’s cities.
Chinese officials responded to the latest data with a mixture of hope and worry, seeking to show sympathy for those who have lost their jobs or had wages cut while trying to instill confidence that better times are coming.
Premier Wen Jiabao said after a cabinet meeting that the economy’s condition was “better than expected” and attributed it to government stimulus measures, according to Xinhua, the official news agency.
But the cabinet, with Mr. Wen as chairman, issued a report warning against “blind optimism” on the economy. The report said the foundations for China’s recovery were not solid, citing weak overseas demand, overcapacity in some industries, job losses and lackluster investment by the private sector.
Chinese economic output data may be less reliable during times of economic stress. Studies by Western economists have found that the Chinese government tends to smooth its quarterly economic data, underestimating gains during booms and losses during downturns.
Some economists were skeptical Thursday about the figures for the first quarter.
“The economy is definitely recovering, but for it to have troughed at 6 percent seems a little high,” said Ben Simpfendorfer, the China economist at Royal Bank of Scotland.
Using another measure of economic growth — the annualized rate of growth from one quarter to the next — China’s economy may have actually accelerated during the first quarter of this year.
Qu Hongbin, a China economist at HSBC, calculated that using that measure, China’s economy had grown at an annual rate of 6.2 percent in the first quarter, compared with just 2.5 percent in the fourth quarter of last year.
“The fourth quarter was actually the weakest,” he said.
The Chinese government releases only the growth rate in each quarter compared with a year earlier, as well as the total value of economic production for the year to date. Performing the calculation done by Mr. Qu requires estimating the exact value of each output in each quarter, a difficult process that entails coming up with seasonal adjustments as well.
The National Bureau of Statistics said Thursday that, next year, it would also start releasing the annualized growth rate from one quarter to the next, a measurement widely used in Western countries to capture short-term fluctuations in the pace of economic growth.
The government agency mentioned joblessness briefly in a statement on Thursday but provided no new details. The official unemployment rate among urban workers who are still living in the cities in which the government originally registered them edged up to 4.2 percent in the fourth quarter after hovering at 4 percent since the summer of 2007.
But that politically sensitive figure excludes more than 100 million workers who have migrated from rural areas or between cities to find jobs, often in the export sector, and are now feeling the brunt of dismissals, pay cuts and sharply shortened work hours.
China’s huge export sector remained a formidable drag on the economy during the first quarter of this year, tumbling 20 percent from a year earlier. But retail sales were up 14.7 percent in March from a year ago, accelerating from a gain of 11.6 percent in February.
Many business executives at the opening of the Canton Fair on Wednesday said that they were trying to sell more in their home market after concluding that overseas markets were far weaker.
China’s economic stimulus measures, from a record surge in bank lending to heavy government spending on new rail lines and other infrastructure, have started to increase the level of domestic investment; many economists expect an even stronger effect to show up in data for the second quarter, particularly given that urban fixed asset investment jumped 30.3 percent in March from a year earlier.
Joe Zhang, the general manager of Famous Grand M&E Equipment, which manufactures welding equipment for the assembly of boilers at factories, said his attention was increasingly on buyers in China, not those on the other side of the world.
“We sell a lot to the domestic market, and with the stimulus program, our sales are up from a year ago by 10 percent,” he said.
Thursday’s economic statistics prompted some investment banks to revise upward their growth estimates for the Chinese economy for all of this year. R.B.S. increased its estimate to 7 percent, from 5 percent, while UBS raised its estimated to between 7 and 7.5 percent, from 6.5 percent.
Falling prices were less of a worry in March at the consumer level, as deflation compared with a year earlier slowed to 1.2 percent, from 1.6 percent in February.
But prices continued to tumble rapidly at factory gates because of lower energy prices and industrial overcapacity. Producer prices dropped 6 percent in March from a year earlier, compared with a fall of 4.5 percent in February.
The data seemed to neither encourage nor discourage investors. The Hang Seng Index in Hong Kong closed with a loss of 0.55 percent while the A-share market in Shanghai fell 0.08 percent.
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