Declines slowed in power consumption, an important indicator of industrial activity. It dropped 3.49 percent in March, compared with an 11.37-percent decline in December last year. Power use fell 5.2 percent in the January-February period, according to the China Electricity Council.

Many Chinese statistics for the first two months were released as a unit, partly because of the change in the Lunar New Year, which this year fell in January instead of February.

According to the State Grid Corporation of China, power consumption rose 1.3 percent year on year in the first 10 days of March, but then fell 2.2 percent in the second 10 days and 2.7 percent in the last 10 days. The first 10 days of April showed a year-on-year drop of about 3.57 percent.

Zhang Liqun, a researcher with the Development Research Center of the State Council (cabinet), said statistics for March trade, real estate sales and fiscal revenue showed positive signs. By that, he meant that the rate of decline had in many cases eased. The effects of the government's stimulus package would become more evident in the second quarter, he said.

Remaining difficulties

"We should not be too optimistic about these changes as the economic outlook is still grave," said Wang Tongsan, an economist with the Chinese Academy of Social Sciences (CASS), a government think tank.

The NBS spokesman said the main barriers to recovery included slumping export demand, falling corporate profits and fiscal revenue and what the Chinese leadership has described as a "grave" situation for employment.

During the first quarter, foreign trade dropped 24.9 percent to US$428.7 billion. Exports were down 19.7 percent to US$245.5 billion. Imports slumped 30.9 percent to US$183.2 billion.

Actual foreign direct investment stood at US$21.8 billion, down US$5.6 billion from same period of last year.

China's major trading partners are still facing economic difficulties. US retail sales fell 1.1 percent in March, when economists were looking for a 0.3-percent gain. Japanese industrial output fell a seasonally adjusted 9.4 percent in February from the previous month, which marked a fall for the fifth month running, the longest slump since 2001.

Yao Jingyuan, NBS chief economist, said external demand remained "the most volatile factor" in the country's economic development.

Corporate earnings shrank as economic growth slowed. The Aluminum Corp. of China (Chalco) reported a 99.9-percent plunge in full-year net profit to 9.2 million yuan in 2008. Yunnan Copper posted a 2008 loss of 2.79 billion yuan because of lower metal prices and the write-down of inventories.

Tax cuts intended to spur the economy and the financial markets reduced government revenues. First-quarter fiscal revenue fell 8.3percent to 1.46 trillion yuan.

In the first two months, the number of newly employed people in urban areas reached 1.62 million, down 210,000 from the same period of 2008. The employment of college graduates in their first jobs fell to 20 percent in the first quarter from the historical average of 70 percent.

Record high credit

Bank credit rose rapidly in the first quarter. Credit extended by banks hit 4.58 trillion yuan, representing about 90 percent of the annual target.