On a quarter-to-quarter basis, which is how other major economies report data, the economy lost steam, expanding just 1.3 percent. With US interest rates likely to rise significantly faster over the next 12 to 18 months than in 2015 or 2016, the possible spillover to Chinese financial conditions is a clear downside risk to the country's economic outlook.
Growth of median per-capita disposable income decelerated to 6.7 per cent in the first quarter, down from 8.3 per cent previous year and slower than GDP expansion for the first time since NBS began releasing the gauge in March 2014.
In fact, the recovery in the Chinese economy has already started to show signs of slowing.
This is reflected in China's better-than-expected industrial production and consumption in the first quarter.
Based on the stronger-than-expected data, investment bank J.P. Morgan (NYSE:JPM) raised its Y 2017 GDP growth forecast for China by 0.1 percentage points to 6.7%, citing broad-based strength across various sectors reflected in the data.
Retail spending grew a forecast-beating 10.9 percent, while fixed-asset investment rose 9.2 percent in the first three months of the year, representing a slight acceleration from February.
It was also higher than the 6-percent annual gain seen in 2016, NBS said.
Property sales measured by floor area grew 19.5% in January-March from the same period a year earlier, but that was down sharply from the 25.1% growth in January and February.
It has bumped up interest rates on money market instruments and special short- and medium-term loans several times already this year and further modest increases are expected, especially if US rates continue to rise.
"Because the latest round of cooling measures came out after March 17, their impact on the entire economy including home prices may show in April or later", Mao Shengyong, a spokesman from China's statistics bureau said at a briefing on Monday.
Beijing has said it wants to reorient the economy away from relying on debt-fuelled investment and towards a consumer-driven model, but the transition has proven challenging, leading to the slower growth readings in recent years.
China's economy stormed back to power 1/3 of global growth in 2017 and its government is making progress in restraining runaway credit growth.
However, the NBS said in a note accompanying the data that Beijing's daily new home transaction volumes fell in March after the tougher property curbs were introduced but did not provide a number.
"I think the tightening focus will shift to more medium- and small-sized cities in the future because sales have fallen quite significantly in first-tier cities", said emerging markets economist Zhou Hao, from Commerzbank AG in Singapore.