"The slowdown in China's economic growth means the government is making inroads with structural adjustments and policy efforts to address financial vulnerabilities," according to a World Bank report. In the medium term, these efforts are helping China gradually shift its growth model from manufacturing to services, from investment to consumption, and from exports to domestic spending.

The government has put in place policies to contain fast expansion in credit growth, regulate borrowing by local governments and eliminate industrial overcapacity, which help lower investment in sectors such as real estate. At the same time, it has tried to put a floor on the slowdown, with limited but targeted support measures.

Despite a stock market rout and mounting economic headwinds, the Chinese economy is holding steady and showing signs of a shift, albeit slowly, with consumption and the services sector gradually taking over as main drivers of growth.

"China's economy is functioning well in general, with some problems remaining that require the wisdom of all and solid efforts," President Xi said.

At a Thursday meeting, chaired by Xi, China's top decision-making body said the central government would take "effective measures" to nurture the steady growth of consumption, investment and exports, key engines of growth, while stepping up "targeted policies" to counter downward pressure.