China's economy slowed to the lowest pace in ten years, as the country took more hits by a global slowdown, official figures showed on Thursday, but several key indicators are pointing to signs of recovery.

        The Gross Domestic Product (GDP) expanded 6.1 percent year-on-year in the first quarter of 2009, the seventh straight quarter of deceleration, Li Xiaochao, spokesman for the National Bureau of Statistics (NBS) told a long-awaited conference in Beijing.

       The latest economic snapshot highlighted the challenges facing the government, which is reportedly mulling new stimulus measures on top of a US$586 billion package announced in November and plans to revitalize 10 major industries.

　　Thanks to these measures, "the economy has taken on several positive changes, and performed better than expected," said Li, repeating Premier Wen Jiabao's words.

　　Fixed assets investment in the country jumped 28.8 percent year-on-year in the first quarter, 4.2 percentage points higher than the growth in the same period last year, as the country pumped tens of billions of into the construction of highways, airports, ports, and electricity grids.

　　Chinese consumers proved another bright spot. Unlike their western counterpart who cut back spending on almost everything, they continue their buying in spite of lingering uncertainties.

　　Real retail sales, strapping out of inflation, grew 15.9 percent from a year earlier in the first three months, compared with a growth of 12.3 percent in the same period last year.

　　The latest retail reading might be music to the government who is counting on the consumers to help fill the void left by falling external demand and has taken a series of measures, including a 850-billion-yuan health care reform plan which is expected to ease consumers' worries about the future, to spur them to spend more.

　　What may also inspire their urge to consume are falling prices. The Consumer Price Index (CPI), which measures a typical basket goods bought by consumers, fell 0.6 percent from a year earlier, after dropping 1.6 percent in the previous month.

　　The Producer Price Index, which measures factory gate price levels, declined 4.6 percent, compared with a fall of 4.5 percent in February. Lower price levels are providing more leeway for the centeral bank to cut interest rates to boost growth.