The data had an immediate impact on markets. The Australia dollar dipped while Hong Kong's Hang Seng index fell into negative territory.
The data come on the heels of trade figures released over the weekend, which showed exports tumbling 18.1 percent in February from the year ago period, defying expectations of a rise.
China's central bank is also said to be prepared to take its strongest action since 2012 to loosen monetary policy if economic growth slows further, by cutting the amount of cash that banks must keep as reserves, Reuters reported this week.
(Read more: Chinese Premier: Financialproduct defaults unavoidable)
According to Christian Schulz, Senior Economist at Berenberg Bank, while the data imply a moderating economy, it's unlikely to suggest a hard landing scenario.
"I think a further gradual slowdown of the Chinese economy is more reflected in this data than a hard landing," said Schulz, adding that Chinese policymakers have enough tools to avert a pronounced slowdown.
"We always have to remember that the Chinese government has huge new private savings in terms of savings rate, low inflation, sound public finances and huge foreign reserves which allows them to intervene as well," he said.
"Worse come to worse, the government is in the best position to react," he noted.
(Read more: Marc Faber: China is growing at 4% and that's okay)
In comments to CNBC earlier in the day, Marc Faber, author of The Gloom, Boom and Doom Report, noted that China's actual growth rate is probably closer to 4 percent, or just over half the rate that authorities are reporting. However, he said there was no need for investors to fret.
"I think 4 percent growth in a world that is has no growth is actually very good," the perennial market bear said.
Indeed, slower growth appears to be something China is prepared to accept for now. In a press conference in Beijing at the close of the National People's Congress, Chinese Premier Li Keqiang hinted at tolerance for below-target growth.
"The GDP (gross domestic product) growth target [for 2014] is around 7.5 percent. 'Around' means there is some flexibility and we have some tolerance," Li said, adding that the lower limit on growth must support job creation.