Amid the uncertainties of the global economy, China's economic slowdown this year has triggered worries that the country's growth engine is losing steam. Some even anticipate a hard landing. Lu Zhongyuan, Vice President of the Development Research Center of the State Council, dismissed the worries at a recent briefing in Beijing. Edited excerpts of his views follow:

China's recent slowdown is the result of short-term moderation to the overheated real economy and the growth rate is still within a normal range. China's economic growth rate is expected to exceed 9 percent this year.

A healthy economic growth rate features fluctuations in a reasonable range that is determined by growth potential. The reasonable fluctuation range of China's economic growth should be between 8 and 12 percent in view of the performance of the national economy since the country adopted the reform and opening-up policy in the late 1970s.  

China's economy is experiencing a series of macro-adjustments in finance and national long-term planning. The adjustments are targeted at cooling the overheated economy and avoiding ups and downs. Slower growth rates will actually help China restructure its economy and reduce energy consumption and emissions.

Under the current situation, slower economic growth is consistent with macro-control policies and conducive to controlling total demand and containing rising prices. China's economy can maintain an appropriate and reasonable growth rate.

The Chinese economy's growth potential is propped up by a set of positive factors. First, strong demand and supply will drive the Chinese economy forward. Liquidity is abundant and the advantage of a huge amount of labor will remain for several years. On the demand side, China's industrialization and urbanization as well as consumers' expanding consumption will continue propelling the country's economic growth for at least 10 years. As a result of the urbanization, several hundred million farmers will become urbanites in the future. Their consumption and demand will surely be an important engine for the Chinese economy, which will not happen in developed countries and even some developing countries.

Second, the low cost of technological innovation will surely make the new products more competitive. The cost of introducing new technologies in China will be much lower after being shared by several provinces whose area and population may be bigger than several countries. The low cost will lower the price of new products and raise their market penetration in a short period of time.

China's economic growth will not be too slow although we have slowdowns at present, and the robust growth will remain for several years at least.

Risks and challenges

Although the Chinese economy's growth prospect is optimistic, it still faces multiple challenges, some of which are severe, such as the uncertainty of the U.S. and European economic recoveries, rising inflation pressures, emerging financial risks of local governments and tightening monetary policies for small and micro enterprises.

The biggest challenge comes from uncertainties and instabilities from the external economic environment. Europe's sovereign debt woes and tepid global economic growth will add uncertainty to domestic policymaking. If the United States launches another round of quantitative easing this year, it will strongly affect the global economy.

Inflation pressure remains big due to loose liquidity conditions at home and abroad, and imported inflation and rising costs at home.

Monetary tightening is necessary but not enough for us to combat cost increases and imported inflation simultaneously. This calls for the fiscal policy and structural reform to play a more important role. In addition, we need to encourage market competition in specific sectors to ensure price stability.

Macro-control policies should continue and remain stable but they need to be improved. Focus should be put on long-term reforms and transformations.