China's economy picking up steam

Moreover, it has poured a large amount of liquidity into the financial sector. The NDRC approved many large investment and infrastructure projects this year, with a total investment volume surpassing the 4 trillion yuan ($635.93 billion) stimulus package injected into the economy after the 2008 global financial crisis.

A report by SWS Research Co Ltd says the Chinese economy has stabilized. But different from Stephen Green's view that the Chinese economy is in a U-shaped recovery, the SWS Research report says that within a certain period of time, the Chinese economy will be in a horizontal L-shape. According to the report, the Chinese economy in the future will resemble that between 1998 and 2002 following the Asian financial crisis.

While external factors can explain the slowing economic growth, a restructuring of the economy can also be responsible. Time is needed to eliminate excessive production capacity, digest financial risks and transform the country's growth pattern. The economy did not pick up immediately after reaching the bottom, but remained at the bottom for nearly five years.

This round of economic adjustment started in 2007 and the vertical part of the L-shape has now been complete, with the horizontal portion beginning in the third quarter.

"To step out of the present predicament, China should rely on reforming production rather than short-term control," said the SWS report. Present reforms mainly concern income distribution, financial reform and monopoly-breaking reform. The changes, if achieved, are expected to help facilitate the Chinese economy's rise once again.

A more sound economy

Future economic growth in China mainly depends on the soundness of the Chinese economy itself. Since 2007, China has launched a strategic campaign of economic restructuring.

Five years later, this campaign has greatly moved forward and the economy become a lot sounder.

Zhang says one change is that consumption has been a larger contributor to economic growth than investment. In the first nine months this year, the proportion of consumption to total GDP was 55 percent, while that of investment was 50.5 percent.

"Regarding economic development in the first three quarters, domestic demand made a contribution of 105.5 percent, while external demand was negative at 5.5 percent. We should place emphasis on development to expand domestic demand, which has the potential to maintain steady and fast economic growth," said Zhang.

He adds that 42 detailed rules have been formulated this year to promote private investment. Thus far, the proportion of private investment has already reached 62 percent, indicating that the private economy has achieved rapid development.

NDRC statistics also show that the structure of primary, secondary and tertiary industries is more coordinated.

"In the industrial sector, the proportion of strategic emerging industries and high-tech industries is increasing and the transformation of traditional industries is accelerating. The proportion of tertiary industry continues to rise," said an NDRC release.

As for urban and rural development, China's urbanization rate (ratio of urban population among total population) reached 51.3 percent in 2011.

Rural infrastructure construction, basic public services, tap water supply, electricity, roads, gas and housing in rural areas, as well as farmers' production and living conditions, have all been greatly improved.

"Although there are still many problems, such as excessive production and extensive management in some industries, that need to be solved, we will enhance efforts to implement various policies and measures and quicken our pace in transforming the economic growth mode," Zhang said.