Xi Jinping seeks to boost domestic demand as trade war looms and figures suggest growth is slowing in large parts of China

Chinese President Xi Jinping said on Monday that the country would try to boost domestic demand to keep the world’s second biggest economy on track in a “complicated” external political and economic situation.

Xi comments, published by the official Xinhua news agency, followed the release of the latest official growth figures, which suggested the economy had grown by 6. 8 per cent in the first quarter – a figure that has been almost unchanged over 11 successive quarters.

However, the provincial GDP figures that have been released so far suggest a broad slowdown in many parts of the country.

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Among the 17 provinces that have published their first-quarter figures, 11 provinces saw growth rates falling compared with the same period last year, four were unchanged and only two posted higher rates.

The looming threat of a trade war with the United States is also casting a shadow over the prospects for future growth.

Tianjin, once a poster child for Chinese growth, reported a mere 1.9 per cent year-on-year GDP increase.

This number was a sharp slump from the 8.0 per cent a year earlier, but also far lower than the national level.

Between 2010 and 2013, the northern city, a modern manufacturing hub, saw double-digit growth rates of between 12.4 per cent and 17.4 per cent and recorded the highest level of any Chinese province or region for four straight years.

But according to the latest official figures, in the first quarter the output growth for industries with annual revenue of more than 20 million yuan (US$3.2 million) was just 0.1 per cent, 2.2 points lower than 2017

Fixed asset investment excluding farmers dropped 25.6 per cent from a year earlier in the first quarter.

As a costal metropolis whose economy relied on heavy industry and logistics in the past, Tianjin was struggling due to a failure to attract new investment and high-end industries.

“The economic headwinds are still pretty strong,” the Tianjin Statistics Bureau said, “but the momentum towards high-quality development has not changed”.

The decline has also been blamed on the discovery that false statistics had been recorded for its special economic zone – the main engine of the local economy.

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This January, Tianjin admitted that the Binhai New Area had overstated its fiscal and economic data for 2016 by a third.

As a result, Tianjin reported a growth of only 3.6 per cent for last year, the slowest rate in the country, while the figure for the first quarter was another after-effect of correcting the data.

However, Tianjin was not the first provincial authority to admit cooking its books. Before then, the provinces of Liaoning and Inner Mongolia also confessed to overstating their figures. The two have yet to release first-quarter reports this year.

To avoid similar problems happening again, China’s National Bureau of Statistics has previously announced it would take over data collection at regional level from 2019.

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The central government in Beijing, which is committed to curbing financial risk, has said it wants “high-quality” development rather than the largest possible growth in GDP.

But the latest figures also highlight the scale of the challenge in pivoting to innovation-driven development and away from the old model of relying on borrowing and investment.

The fastest growing province in the first quarter was Guizhou, which posted a 10.1 per cent rise in GDP – the only double-digital figure so far.

The mountainous southwestern province has sought to transform itself into a big data centre and Apple, the world largest company by market value, has officially transferred its Chinese iCloud operations there.

However. the data indicates that much of this growth was driven by investment rather than innovation, with a 17.8 per cent year-on-year increase in fixed asset investment, well above the national total of 10.3.

Apart from GDP growth, Guizhou’s debt-to-GDP ratio was also the highest in the country, according to research by Tianfeng Securities.