China's economy grew at its slowest pace in 24 years in 2014, official data showed on Tuesday, undershooting the government's target for the first time since 1998.

Gross domestic product (GDP) expanded 7.4 percent from 7.7 percent in 2013. Government targets have been for a print of "around 7.5 percent."

Growth in the world's second biggest economy has not fallen below 7.6 percent since 1990, when it grew 3.8 percent as a result of international sanctions in the wake of the Tiananmen Square massacre.

Still, investors chose to focus on the fourth quarter GDP growth figure, which came in at 7.3 percent from the year-ago period, beating the 7.2 percent forecast by analysts and holding steady from the prior quarter.

China's Shanghai Composite index closed up 1.85 percent while Hong Kong's Hang Seng traded 0.7 percent higher. The Australian dollar strengthened on the news, trading briefly above $0.82, and touched 97.02 against the yen.

Other data also painted a rosier picture. Retail sales for December rose 11.9 percent from the year ago period, beating forecasts for 11.7 percent, while industrial output climbed 7.9 percent on-year, better than the consensus print for 7.4 percent.

Fixed asset investment, a key growth driver, climbed 15.7 percent in the whole of 2014 from the previous year, just below forecasts for a 15.8 percent rise.

"[The data] was pretty much slightly stronger than expectations across the board. Retail sales surprised slightly on the upside, industrial production was pretty firm. The GDP number was just a tad higher. The authorities should be pleased with the number and I think we needed some good news after the drop on Shanghai Composite yesterday," said Jonathan Pain, author of The Pain Report.

Chinese stocks plunged nearly 8 percent on Monday, after the country's securities regulator rapped three major brokerages for continuing to lend money for stock purchases in violation of rules.

