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Maintaining their GDP target is crucial for China

CHINA's economy appears to be stuttering a little, with latest figures showing it hasn't lived up to expectations for the first three months of the year.

Gross Domestic Product (GDP) grew 7.7pc in the first quarter, down from 7.9pc in the final three months of 2012. Analysts had been forecasting a figure of 8pc.

By the standards of what we're experiencing in Europe, that remains a phenomenal rate.

Ireland has been keen to try and tap into the Chinese market, with exports predicted to grow 11pc per year up to 2030. It's not an easy task for a small country trying to showcase itself to the most populous nation in the world. The population of Beijing alone is almost five times that of the Irish Republic.

Despite this, bankers HSBC have forecast that China will overtake France as Ireland's fourth biggest export market by that year.

The Government pulled out all the stops when China's now president, Xi Jinping, visited Ireland in February 2012; while Taoiseach Enda Kenny reciprocated a matter of months later by leading a delegation to the sprawling country. But it hasn't been as strong a start to the year for the global powerhouse as expected, following a year when the country had its slowest growth rate for 13 years.

Industrial output had the weakest start to a year since 2009 and lending and retail sales growth slowed, highlighting the challenges that face a new leadership that has recently assumed power in the country's once-in-a-decade shuffle of top brass.

Sheng Laiyun, spokesman at the National Bureau of Statistics, told a news conference that worries were unfounded.

"China's economic fundamentals haven't changed. We are confident about future growth and optimistic about achieving this year's growth target," Mr Sheng said.

China has set a 7.5pc GDP growth target for 2013, a level Beijing believes will create sufficient jobs while providing room to deliver structural reforms the government – and international policy advisers – believe are necessary to put growth on a more sustainable long-term footing.

The rapid rise of a new consumer class in China is a factor that keeps investors broadly optimistic about the longer term future of the economy, provided policymakers can rebalance the drivers of growth away from the investment spending and exports to which it is currently tilted.

China's economic engine has been in overdrive for most of the period since 1978, when reformist leader Deng Xiaoping decided to adopt free market reforms through his 'open door' policy, although the rate began waning last year.

GDP grew at an average of 10pc a year and the World Bank estimated that 600 million Chinese people were lifted out of poverty between 1981 and 2004. A middle class has been created, focused in the megacities, although wages still remain low down in the rankings compared with the rest of the industrialised world.

The economic miracle has come at a price. A growing gap between rich and poor, unrest and sporadic protests in the countryside and staggering environmental challenges, including pollution, pose hefty problems to the new leadership.

But maintaining the country's GDP target for 2013 tops the list of priorities. (Additional reporting Reuters)

Irish Independent