PBOC's Zhou: Q1 GDP growth 'reasonable'

China's economic growth was "reasonable" in the first quarter as the world's second-largest economy sacrifices growth to make structural reforms, the country's central bank Governor Zhou Xiaochuan has said.

A prudent monetary policy stance will be maintained to control inflation, Zhou told a meeting of the International Monetary Fund in Washington, according to the People's Bank of China's website yesterday.

"China's undergoing economic restructuring, which sometimes is not in lockstep with growth," he said.

"We need to sacrifice short-term growth for the purposes of reforms and structural adjustments."

China's gross domestic product grew 7.7 percent from a year earlier in the first three months of this year, missing market expectations and slowing from 7.9 percent in the final quarter of last year.

The surprisingly weaker performance has triggered calls for the tightening policies to be lifted especially when inflation eased to 2.1 percent in March from February's 10-month high of 3.2 percent.

"China's economic growth is stable - within the reasonable realm - together with an acceptable inflation rate," Zhou said. "China's government has strengthened macro-economic control amid many uncertainties in the global economy in the first quarter, and we pay high attention to structural reforms."

In another statement over the weekend, the PBOC said: "The experience of China's economic growth indicates that pushing forward reform and structural adjustment can inject sustained drivers into the economy, which can not only boost growth potential in the medium and long term but also produce notable effects in promoting growth and job creation in the short term."

The statement cited views the Chinese delegation gave to a meeting of central bank governors and finance ministers from the Group of 20 nations in Washington last week.

"China's structural adjustment has scored notable achievements," the PBOC statement said.

The contribution of service industries to economic growth in the first quarter exceeded that of manufacturing for the first time, it said.

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