The slowing Chinese economy looks headed for a "soft landing" but could face turbulence from the crisis-plagued eurozone, the International Monetary Fund said Wednesday.
In a staff report on the Chinese economy, the Washington-based crisis lender said that the world's most populous country would see 2012 growth "moderate" to about 8 per cent, which would be a roaring pace almost anywhere else.
With the eurozone in recession and the United States economy sputtering, China remains an engine of rapid growth.
The slowing in China has been partly due to Beijing's plan to ease into a "more sustainable pace" of expansion, trimming inflation to about 3.5 per cent by the IMF's 2012 projection.
"But a worsening of the euro area crisis poses a key risk to the outlook," the report said.
Domestically, risks to China's economy include the property sector, the IMF report found. The country's banking system and the balance sheets of local governments were additional looming issues.
If the impact of the eurozone crisis and other external factors worsens, China has "ample room to respond forcefully" through domestic spending.
The IMF reiterated its longstanding call for China to make faster progress in moving its economy from dependence on exports and investment to internal consumer demand, which would "substantially boost living standards and make growth more balanced, inclusive, and sustainable."
The staff report noted a "welcome" and significant reduction in China's current account surplus since a 2007 peak but greater reliance since then on investment spending, which "will be difficult to sustain."
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