Industrial restructuring

He noted that when looking at the decline in industrial power use, it was important to remember that industrial upgrading was still in progress. The decline of electricity consumption by heavy industry, which accounts for 82 percent of total industrial power consumption, was the leading cause for the overall decline.

China has spent years working to scale back its smokestack industries so it can cut energy intensity by 20 percent and major emissions by 10 percent between 2006 and 2010.

China plans to eliminate 15 million kw/hrs of power provided by small coal-powered plants, as well as obsolete capacity of 10 million tonnes in the iron industry and 6 million tonnes in the steel industry this year.

The first-quarter output growth rate of the six most energy-intensive sectors (iron and steel, nonferrous metals, building materials, petrochemicals, coking and chemicals) fell 12.5 percentage points on average from a year earlier, to 2.3 percent, NBS figures showed.

Power use by those sectors also showed large declines: iron and steel (10.24 percent), chemicals (13.14 percent) and nonferrous metals (16.78 percent) in the first quarter, according to the CEC.

Meanwhile, efforts to upgrade and rebalance industry showed progress in the first quarter, with tertiary industry's weight in the economy up 1.6 percentage points and secondary industry's weight down 1.9 points.

Home, car sales brisk

Despite discouraging data on the industrial front, policy makers have taken heart from consumer behavior in recent months, which seems to show that the effort to get more economic growth out of domestic demand and less from external factors is succeeding.

GDP expanded 6.1 percent in the first quarter, and the domestic consumption provided the largest share at 4.3 percentage points, accounting for 70.5 percent of the total growth. Investment generated another 2 points, accounting for 32.8 percent of the total growth, while the decline in exports shaved 0.2 point of the total, according to NBS figures.

The economy expanded by 10.6 percent year on year in the first quarter of 2008. Consumption accounted for 44.4 percent of total GDP growth, with investment generating another 46.7 percent and exports providing the remaining 8.9 percent of the total, according to Zhu Baoliang, an expert with the NBS.

China has become the world's largest vehicle market, with more than 2.67 million cars sold in the first quarter, up 3.88 percent year on year.

Car sales were buoyed by government stimulus policies, said Zhang Yunpeng, an analyst with Beijing-based Huarong Securities. In January, China halved the purchase tax on passenger cars to 5 percent for models with engine displacements of less than 1.6 liters.

More than 1.15 million vehicles were sold last month in China, up 25 percent in terms of units, while sales in the United States fell 34.4 percent year on year to 819,540 units, according to the China Association of Automobile Manufacturers.

Other NBS figures this week showed that retail sales rose 14.8 percent in April year on year to 934.32 billion yuan, and the 18.5 percent monthly vehicle sales growth in terms of sales revenue dwarfed other items by 3.7 percentage points.

Private-sector housing sales rose 8.2 percent year on year in 70 mid-sized and large cities in the first quarter, including Beijing, Shanghai, Guangzhou and other metropolises.

"Auto and home sales were the most important consumption sectors and their revival showed a trend of consumption recovery in China. This would stimulate the growth of related industries," said Zhang Liqun.

Boosted by the surge in housing transactions, sales of construction and interior decoration materials rose 10.8 percent in April from a year earlier, according to the NBS.