Options wide open for sustaining steady growth

Li Daokui, head of the Center for China in the World Economy (CCWE) under Tsinghua University and a former central bank advisor, said the country's economy is "showing healthy signs of stabilization."

"We are confident that China will see U-shaped economic recovery in 2012," Li said.

China's urban fixed asset investment rose 20.4 percent year on year in the first half of this year, 0.3 percentage point higher than the growth registered in the first five months.

China's customs authority said its exports rose 9.2 percent to $954.38 billion in the first half, 1.6 percentage points higher than the first quarter.

Preliminary figures from the HSBC purchasing managers' index, which gauges the manufacturing sector, rose to a five-month high of 49.5 in July.

The CCWE forecast that the country's GDP will grow by 8.4 percent this year, according to a report on China's economic situation released early this month.

The International Monetary Fund (IMF) said in a report last week that China's economic growth would slow to about 8 percent this year and then rise slightly to 8.5 percent in 2013.

China's economy may be experiencing a soft landing despite growing global headwinds, and China is positioned to respond to a possible deterioration of the external environment, the IMF said.

Li said that as the country's economy stabilizes, the government should not adopt a massive stimulus plan like the one implemented after the 2008 financial crisis, but only make appropriate adjustments to its macroeconomic policies.

"Seeking steady growth should be combined with pushing forward reforms, especially the reform of the financial system, and taking concrete measures to boost private enterprise investment," Li said.

China should also focus on economic restructuring in its pursuit of steady growth by supporting more efficient industries and phasing out outdated production capacity, he said.

Stabilizing growth should also be combined with improving people's livelihood. The country should boost investment in public investment projects, such as water conservation and disaster-relief projects, Li said.

"To seek steady growth amid adversities, China should focus on promoting reforms, accelerating economic restructuring and improving people's livelihood," according to Li.