ADB economist 'optimistic' on China economy

In terms of China, "its income gap with advanced countries such as US, many European countries, and Japan remains very large. China's regional disparity and rural-urban income gaps are glaring. These suggest China's growth potential remains strong," he said.

Historical data show that Japan, South Korea, and Chinese Taiwan grew at 7 to 8 percent or even higher annually continuously during 15 to 20 years prior to becoming a high income country. China's current per capita income is still less than half of the threshold for a high income country, he said.

"So there is no reason why China cannot grow at that rate in the coming, say, ten years, especially from the point of view of growth potential," said Zhuang.

In his opinion, in order to achieve the great potential, there is a lot to do for the Chinese government to reform and restructure the country's economy, such as investing more on innovation and new technology and continuing to invest in physical infrastructure and human capital.

China should also deepen structural reform, including factor market reform and State-owned enterprise reform, and reduce the constraints to the development of services and promote urbanization.

Zhuang noted that China needed to address the issue of rising inequality and make growth more inclusive, and to improve its system of financial regulation and supervision and improve the management of local government finance.

"I am quite optimistic about the Chinese economy, because these are all on the policy agenda of the current government. I believe the Chinese economy can achieve a soft landing. The probability of a hard landing is very low," he said.