China will still be a huge growth driver for Asia: Australian economist

He said China certainly has enough space to use fiscal policy and monetary policy to cushion a growth slowdown if necessary. The choice to only deploy such measures in a modest and targeted way to date is "appropriate."

"Supply-side reform is the key and, in particular, opening State-owned enterprises in the services sector to more competition from private sector players. I'm confident that China's leaders understand this is essential to achieving their target of at least 6.5 percent growth between now and 2020."

During the Two Sessions which just ended earlier this month, China has passed the 13th Five-Year Plan, drawing a blueprint for the country's economic development in the next five years.

Laurenceson found that there is an increased emphasis on development driven by innovation and entrepreneurship in this year's Two Session documents.

"Now the challenge is to put in place specific policies that will unleash these forces. The most important of these is to put private sector firms on a level playing field with State-owned enterprises. If comprehensive reforms along these lines are implemented then I am extremely confident that China's growth target can be met without resorting to the ultra-loose macroeconomic policies seen in the US, the EU and Japan."

As for the Belt and Road Initiative and the Asian Infrastructure Investment Bank, he hold that they pose no threat to the current system at all.

"They do not replace existing institutions. Rather, they are new initiatives that complement and improve upon the current system. Poor quality infrastructure restricts trade and investment opportunities in the Asian region. If the Belt and Road Initiative and the AIIB can help to ease this constraint, then the region as a whole will benefit."

As an economist who has been watching Chinese economy for a long time, Laurenceson noticed that there is always an impatience from some groups within China and abroad for more rapid reform.

"It's true that progress in some areas has been slowed than hoped for, such as exposing State-owned firms to competition from the private sector. But in other areas such as the rise of the internet economy China transformation has been stunning and it now leads the world."

"My overall assessment is that in the last year the pace of reform has picked up and I think this will continue in the next few years."