Q&A: What lies ahead in 2015 for Chinese economy?

It is almost certain that China will post its lowest growth rate in more than a decade in 2014, but experts seem uncertain about what will happen in 2015.

Here we review the outlook and risks for Chinese economy in 2015:

-- Is the economy sliding toward a hard landing?

Growth in 2014 looks likely to have sagged below 7.5 percent. This year, it could potentially dip lower, with property downturn and industrial overcapacity still being the main drags.

The government's efforts to balance reform with growth will also exert a downward pressure, but it will be a soft landing rather than a sharp contraction, as the broader economy and job market remain healthy.

There have been signs of a rebalancing, with services accounting for a greater share of output than manufacturing; and consumption accounting for a larger share of gross domestic product (GDP) than fixed asset investment.

Moreover, policies, such as the abolition of registered capital requirements for new firms and the replacement of business tax with value-added tax, will provide dividends.

Government think tank economists have lowered forecasts for GDP growth for 2015, with the rate hovering between 7 percent and 7.3 percent.

-- Is China the next country to face the threat of deflation?

Deflation is not an immediate concern for China, although deflation pressure will likely persist in 2015.

Despite the plunge in global oil prices and other commodities, the cost of other consumer goods are on the up, albeit slower than the government initially anticipated at the start of last year.

Moreover, the central bank has powerful tools to counter falling prices, such as reducing interest rates and reserve requirement ratio for banks.

Analysts have advised the government to use both monetary policy tools and structural reform measures to head off the risk of deflation.

-- Is China's property sector heading toward a collapse?

China's property market saw a boom following the global financial crisis, with housing prices rising dramatically. This led to ballooning inventories, which weighed down construction activity and investment as the market cooled in late 2013.

The downturn continued in 2014 and spread to most major cities and is likely to persist this year.

China International Capital Corp. (CICC) estimates the property sector could reduce China's 2014 GDP growth by as much as one percent, the largest drag on the economy last year. The sector is also expected to decrease China's 2015 GDP growth by 0.3 percentage points, the CICC forecasts.

However, a collapse is unlikely, given the long-term prospects of trends such as urbanization.

In addition, there are many tools policy makers could use to avert a sharp downturn, such as easing mortgage-lending conditions to allow more home buyers to qualify for cheaper deposits.

-- Is China heading for a financial crisis?

Some economists warned China faces mounting risks this year as growth sputters and deflation pressures prompt a surge in bad debt.

Financial system risks, if unchecked, could cause tremendous damage to Chinese economy.

The mix of slower growth and excess debt could prove "lethal" for the financial system, Bank of America Merrill Lynch said in its "To focus on the three Ds: Deflation, devaluation and default" report.

The bank said 2015/2016 could be dangerous, in terms of bad debt defaults and financial system stability, as the government finally moves to address tough issues, such as control on local government borrowing.

However, the report noted the government had unlimited resources to bail out banks and other organizations as the debts are mostly yuan-denominated, and the country's central bank can always print more money.