Economy will prove naysayers wrong

This time again, China's growth faces real headwinds and cyclical challenges, but the forecast of a major slowdown may underestimate the strength of the policy response. The government, for instance, announced during the CEWC that it would support growth by pursuing new infrastructure projects and technology initiatives. The official statement also said that "prudent" monetary policy and "proactive" fiscal policy will play a role in supporting growth for the year ahead and beyond.

In addition, some commentators lend too much credence to the middle-income trap. They are overly keen to interpret mixed economic data as evidence that China has entered the middle-income trap, even though growth concerns remain primarily cyclical. It is true that some countries have faced sudden slowdowns after reaching the middle-income stage. However, studies show that slowdown in growth can occur at any stage of development - not necessarily only when a country reaches the middle-income stage.

In Asia, in particular, economies such as the Republic of Korea, Singapore, Taiwan and Hong Kong have shown that the middle-income trap can certainly be overcome. It would therefore be wrong to assume that the Chinese mainland is poised to slow down simply because it has reached the middle-income stage.

In fact, in a recent report by the Asia Society Policy Institute, Daniel Rosen says: "China has not exhausted its growth potential. On the contrary, decades of more high-quality growth is possible - provided reforms are made". In other words, China should be able to stabilize growth at a moderate level, provided it keeps reorienting its growth model.

Overall, this year has seen good progress in the implementation of the reform agenda. But political determination will be required to further accelerate the pace of reforms and stabilize growth in the medium term, going beyond next year. In this sense, the announcements made during the CEWC represents a positive development, as they underscore the government's commitment to support growth. For all these reasons, the majority view of a moderate growth for the medium term should be favored over the scenario of a sharp slowdown.

The author is an assistant professor in economics, Nottingham University Business School in China.