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Economic growth in a third of China well below 7% national average

[BEIJING] About a third of China's regions posted economic growth of less than 7 per cent in the year's first quarter, data showed, trailing the wealthiest regions, and adding to fears the nation is headed for its worst downturn in a quarter of a century.

In a worrying sign of a yawning wealth gap, the difference between China's fastest- and slowest-growing regions spiked to a whopping 8.8 percentage points in the first quarter, media and local government figures showed.

Some analysts cautioned against reading too much into the data, which also showed a third of China growing faster than 8 per cent in the first quarter, at odds with the country's average growth of 7 per cent in that period.

But the growth discrepancy was nonetheless stark, raising questions about whether China needs to do more to help its laggard regions.

The province of Liaoning in the northeastern rustbelt was at the bottom of the growth league, with its economy expanding just 1.9 per cent between January and March, compared with a year ago.

The major coal-producing province of Shanxi was second from the bottom, posting economic growth of just 2.5 per cent.

In contrast, the southwestern Chongqing municipality showed annual growth of 10.7 per cent to top the economic growth chart in the first quarter.

The southern province of Guangdong, an export powerhouse and one of China's richest regions, posted first-quarter economic growth 7.2 per cent, even though the value of the country's total trade fell 6.3 per cent in the first three months.

"The authorities must be very, very worried when they look at these figures," said Kevin Lai, an economist at Daiwa Securities in Hong Kong. "Across the nation, I think actual gross domestic product growth must have been weaker than 7 per cent (in the first quarter)."

China's regional economic growth reports are infamous for not tallying up with national data, as career-obsessed officials overstate the strength of local economies in a bid to burnish their credentials.

But as China retools its economy to stress quality over quantity when it comes to growth, some officials have become wary of reporting GDP data that is too high and out of step with the reform agenda.

Still, the growth fall-off may be too sharp for some policymakers' comfort.

To arrest its economic slowdown, China has cut interest rates and reserves requirements four times in the five months since November, and most analysts expect monetary policy to be loosened further.

The economy is forecast to expand 7 per cent this year, the lowest in 25 years and down from 7.4 per cent in 2014.