Forecasts for economy upbeat

Officials and experts expressed their confidence in China's economy at the Third Global Think Tank Summit held over the weekend and said ongoing reforms are creating new room for China's economic growth and directing it toward a more sustainable path.

"The world is misinterpreting China's economy… The growth point for China's economy is crystal clear. It lies in the investment in some public projects such as urban construction, improving underground pipeline network and reducing air and water pollution," Li Daokui, a former advisor to the People's Bank of China (PBC), the country's central bank, said at the summit on Saturday.

According to Li, private investors could be encouraged to enter the market by being allowed to collect fees for the public projects they help build.

"There is still room and potential for China's economy to maintain stable growth in the coming period," Li said.

He was addressing recent concerns among international investors that China's economy may be heading for a crash.

There are some problems in China's economic and financial system such as the rapid credit expansion by State banks, but State-level meetings will be held from July onward to discuss reforms to be taken in the second half of the year, Li said.

"China's economy is entering a new season of reform and transformation," Li said.

Concerns over the health of China's economy have redoubled since last week after China's money-market rates, a key gauge of liquidity for the country's banking system, shoot up to a record high.

The PBC has maintained a tough stance by not injecting liquidity into the money market in an effort to curb informal lending.

The fears prompted some economists and investment banks to cut China's growth forecasts for 2013.

Goldman Sachs cut China's economic growth projection to 7.4 percent from 7.8 percent last week and China International Capital Corp also downgraded its forecast to 7.4 percent from 7.7 percent.

"I'm still rather optimistic that it (the liquidity crisis) is still within the threshold of being manageable. It is part of a signaling game that the PBC and the government are serious about rebalancing the internal Chinese model and desire to reduce cheap credit going to the real estate and low-production investment," Yves Tiberghien, director of Institute of Asian Research at the University of British Columbia in Canada, told the Global Times at the sideline of the summit Friday.

Chinese Vice President Li Yuanchao also said Friday that China will maintain an average 7 percent of GDP growth for the next 10 years.