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China hinterland GDP slippage raises to GDP slowdown concerns

CHINA's interior manufacturing provinces suffered the sharpest growth slowdown in the first quarter as Beijing reduced overcapacity and pollution, reported Reuters.

Growth in Hebei province, China's top steel maker, near Beijing, fell to 4.2 per cent in the first quarter from 8.2 per cent in the previous quarter, to state media.

Coal producing Inner Mongolia experienced GDP growth fall to 7.3 per cent in the first quarter from 9.9 per cent year on year.

Heilongjiang was 4.1 per cent up, the lowest among 30 of 31 provinces and municipalities. Shanxi, another major coal producer grew only 5.5 per cent and is now battered by sinking coal prices.

First quarter growth in almost all Chinese provinces was below their annual targets, according to local media.

Beijing has moved to rein excessive capacity and heavy polluters, even as it has fosters a railway building boom nationwide.

Beijing's Minsheng Securities economist Li Heng said the moves against overcapacity and pollution is having a big impact on economic growth.

"But we see signs of stabilisation due to recent policy support," said Mr Li.

A Reuters poll found respondents believed economic growth could slow to 7.3 per cent in the second quarter from 7.4 per cent in the previous three months.

The economy is expected to grow 7.3 per cent in 2014 - the weakest showing in 24 years and down from 7.7 per cent last year.