China shows signs of debt-fuelled recovery

China posted its slowest economic growth since 2009 but a surge of new debt appears to be fueling a recovery in factory activity, investment and household spending.

That's good news in the near-term, economists say, but many worry it marks a return to the old playbook used during the financial crisis, when Beijing hand-cranked its economy out of a slowdown through massive stimulus, rather than structural reform.

Official data showed China's GDP grew at an annual rate of 6.7 per cent in first quarter of the year, easing slightly from 6.8 per cent in the fourth quarter as expected.

However, other indicators released showed new loans, retail sales, industrial output and fixed asset investment were all better than forecast.

While analysts say the data is evidence of a bottoming out in the economy's slowdown, some say the first quarter of 2015 got off to a similarly glowing start before a stock market crash later that year.

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