Outlook of China's economic growth

China's economic growth slowed during the first half of the year, mainly due to the country's tightening policies and weakening outbound demand, said Paul Heytens, ADB country director for China.

A possible economic slowdown in the second half is mainly due to the faltering global economic recovery, especially the weak demand from European countries as a result of the deepening debt crisis, said the ADB report.

" China's economy appears to be slowing, but only mildly, and growth remains relatively strong," Andrew Pease, chief investment strategist of Russell Investments Co Asia Pacific, said in a research note.

He said most forecasters remain confident that China will slow only modestly in 2012.

"But the longer-term issues are whether China can sustain its exceptionally high growth rate of fixed investment spending and how it will increase the share of consumption in GDP," he said.

The country's gross domestic product rose by 9.5 percent year-on-year in the second quarter of 2011, tapering off from the 9.7-percent growth posted in the first quarter of this year and 9.8 percent in the fourth quarter of last year.

Confidence remained

Although challenged by economic slowdown in Europe and the United States, the Chinese government still sees a promising domestic market.

"I am confident that China's economy will grow over a longer period of time, at a higher level and with better quality and make new contribution to robust, sustainable and balanced growth of the global economy," said Chinese Premier Wen Jiabao at the World Economic Forum's annual meeting lately.

Although inflationary pressure persisted, property price inflation and credit growth have softened from recent record levels due to efforts to withdraw credit stimulus

China, the world's second biggest economy, has taken a slew of steps to curb soaring consumer prices by steadily raising interest rates, ordering banks to put more money in reserve and imposing limits on home purchases in several major cities.

The country's consumer price index, a main gauge of inflation, rose 6.2 percent in August year-on-year, down from a 37-month high of 6.5 percent in July.

In addition, China has increased investment in construction of government-subsidized housing units, including affordable homes, low-rent homes, public rental homes and price-capped homes.

About 36 million affordable housing units are to be built between 2011 and 2015, according to a statement issued by the Ministry of Housing and UrbanRural Development (MOHURD).

Mentioning about the prospect of China's economic development, some economists were optimistic.

"I think it is wise that China starts to be looking at the structure of a different growth model and moving away from export-led and investment-led growth. This will create a better context for balancing both the Chinese economy and the global economy," Robert Zoellick said.

"I am quite optimistic of a continuous soft landing for China," said Johnny Chen, Chief Executive of Asia Pacific of Zurich Financial Services, Hong Kong.

Jing Ulrich, managing director and chairman of Global Markets of JP Morgan China, said he believed China can keep its economic growth between 7 percent to 8 percent in the coming five years.