China’s economy grew by 7.2% in the first quarter, compared with a 6.7% gain in the previous quarter.
The Communist Party’s central bank is expecting growth of 7.1% this year, up from 6.9% in 2016, as the country seeks to cut its dependence on exports to the rest of the world and reduce its reliance on imports.
China’s economy is expected to expand by 7% in 2018, the central bank said in its monthly economic growth report on Wednesday.
China has had two decades of rapid economic growth but its economic performance is slowing down.
In its latest quarter of 2016, China’s GDP grew by 5.9%, the first increase since 2005.
Analysts at Capital Economics have forecast growth of 8.4% this financial year.
“It is a very big change in the Chinese economy, but it’s a very slow recovery, we’re still talking about a 7% increase in GDP in a very small time,” Capital Economics economist Anshuman Ghosh told Reuters.
“This will be a huge setback for the Chinese government.”
The latest growth figures come after China reported a 9.7 per cent rise in exports for the first time in the year.
The Chinese economy grew at its slowest pace in four years in the second quarter, with the economy contracting by 0.2 percentage points in the 12 months to March.
The slowdown has led to concerns about the stability of the economy, with China’s stock market down 3.9 per cent in early trading on Wednesday, the biggest decline since December.
The slowing economy is making the US and European markets vulnerable.
The Dow Jones Industrial Average dropped 6.1 points, or 2.9 percent, to 16,567.17.
The S&P 500 index dropped 4.7 points, to 2,878.10, while the Nasdaq composite dropped 5.2 points, down 0.3 percent.