Analysts who were expecting China's first quarter economic growth to hit at least 8 percent were disappointed when the National Bureau of Statistics (NBS) on Monday announced a 7.7 percent growth in the January to March quarter.

The figure was lower than what most analysts predicted, raising concerns that China's economic recovery remains in a slow pace. The Chinese Government had earlier said that it supports measures to spur economic growth but does not want to overheat the economy.

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Many investors had expected a surprising figure as economic experts predicted higher figures due to an uptick in export growth and liquidity in the economy, after seven straight quarters of weakening expansion.

The Center for Forecasting Science with the Chinese Academy of Sciences also expected China's economy to see a modest rebound in 2013, with secondary and tertiary industries rising by 8.9 percent and 8.8 percent, respectively.

The Asian Development Bank had earlier revised its forecast for China's 2013 economic growth from 8.1 percent to 8.2 percent while stressing downside risks.

A Reuters poll consensus forecast an 8 percent expansion but the world's second largest economy has performed worse than expected, easing back to 7.7 percent from the 7.9 percent pace set in the final quarter of 2012.

The rate was weaker than most market expectations, but still stayed above the 7.5-percent full-year target for 2013 set by the government last month. According to preliminary statistics, the GDP totaled 11.89 trillion yuan (US$1.9 trillion) in the first three months.

China's NBS also announced that industrial output hit 8.9 percent in March from a year earlier. The figure is also lower than the 10 percent prediction of experts. Fixed asset investments, meanwhile, hit 20.9 percent in the first quarter of this year but analysts said the were expecting growth of more than 21 percent.

Retail sales growth also dropped 2.4 percentage points year on year to 12.4 percent, with a total of 5.5451 trillion yuan (US$887.22 billion) in the first quarter of this year.,

But it was not all disappointing figures that NBS released on Monday as it announced that China's real estate investment rose 20.2 percent in the first quarter from the same period a year earlier, while revenues from property sales rose 61.3 percent.

Wei Yao of Societe Generale China, a unit of French multinational banking and financial services company headquartered in Paris, said the figures showed that China's economy is in a week recovery.

A moderate economic growth, however, can be a good thing for a country that continues to work on achieving a more inclusive growth model. As Beijing aims to restructure the economy, a slower GDP can actually help China's policymakers to focus more on the quality rather than the speed of the economy, said Yao.

Yao's statement was supported by Wang Jun, an economist at the China Center for International Economic Exchanges, saying that the figure shows that the new government is not focusing much on growth as its primary task for now.

The unexpected slowdown of China's Q1 economic growth plunged Asian markets on Monday. The Hang Seng China Enterprises Index lost the most, down 1.8%, much higher than the 1.2% drop on Hong Kong's Hang Seng Index. In the mainland, the Shanghai Composite Index suffered a 0.9% loss. In the commodities market, gold dropped 3.1% and spot silver fell 6%. Even the Australian dollar dropped to USD1.0455 after the China data was made known.