The latest official statistics show that the Chinese economy has picked up momentum, through which observers have noticed a major transformation in the country's economic governance.

The world's second largest economy has paid great attention to the further stimulation of domestic demand and more scientific macroeconomic regulation, rather than to credit investing like before.

The Chinese government is striving for a growth model of higher quality and more sustainability through overall planning on growth stabilization, structural readjustment and further reforms, observers say.

STABILIZING GROWTH

After rapid development over the past three decades, China saw a slowdown in economic growth from the beginning of this year.

Furthermore, the global economy is still haunted by the aftermath of the financial crisis and credit crunch, with developed economies lacking the strength for revival, and some emerging economies suffering setbacks.

Thus, whether China could continue to be an "oasis" for the world economy became a hot topic.

Observers say the slowdown in growth is not only caused by fluctuation in the economic cycle, but is also an outcome of structural readjustment.

The latest statistics have cleared up doubts on a possible "hard landing" of the Chinese economy, with market confidence increasing, industrial production and exports growth rising again, and the producer price index (PPI) picking up in July and August.

In addition, the inflation was controlled at a lower level as the consumer price index (CPI) rose by 2.6 percent year-on-year in August, the lowest in three months.

In order to avoid an over-fluctuation in economy, the Chinese government set a 3.5 percent ceiling for this year's inflation, and a basic demand for ensuring growth and employment to keep a reasonable economic operation.

When making policies, the government has not taken measures to ease money and increase deficits, but unveiled steps to reduce the taxing of small businesses, boost urban infrastructure construction, speed up the reconstruction of shantytowns, and build more railways in midwest and poverty-stricken areas.

These measures have not only prevented over-investment, but also ensured a minimum growth, thus increasing market confidence.

According to a report released by HSBC, the HSBC Flash China Manufacturing Purchasing Managers' Index (PMI), a leading and probably the earliest available indicator of manufacturers' operating conditions in China, rose to a six-month high of 51.2 in September from a final reading of 50.1 in August.

Qu Hongbin, chief economist at HSBC, believed recovery was continuing in China, supported by the simultaneous improvement of both external and domestic demand conditions.

The economist expected a more sustained economic rally in China as more fine-tuning stimulus measures would lift domestic investment and demand.

Bruce Kasman, J.P. Morgan's chief economist and managing director of Global Research, also said that thanks to the government's policy and a reviving global economy, the Chinese economy will keep a modest growth at 7-7.5 percent next year.

READJUSTING STRUCTURE

During the crisis, different economies exposed serious structural flaws which made adjustment a top priority. Emerging economies have transformed both their growth model and objectives.

The Chinese economy is now running within "a reasonable range," which provides more space for an overall structural readjustment.

In the latest effort to assure the world about the economy's health, Premier Li Keqiang said earlier this month that the Chinese economy, which is at a crucial stage of transformation and upgrading, is moving forward in a steady way.

"As long as the economy runs within the reasonable range, we will keep the macroeconomic policy generally stable, and focus on shifting the growth model and on structural readjustment," the premier said at the opening ceremony of the Summer Davos Forum in China's northeastern port city of Dalian.

The statement echoed remarks made earlier by President Xi Jinping in a speech delivered at the eighth Group of 20 (G20) summit.

"China's economic fundamentals are sound," Xi said. "China has realized that it has to advance structural reforms in order to solve the problems hindering its long-term economic development, even though it will mean slower growth."

The Chinese leaders' speeches demonstrated the government's determination in structural readjustment.

Ryan Rutkowski, a China research analyst with the Washington-based Peterson Institute for International Economics, said that in the long run, structural reform will boost the Chinese economy's sustainable growth.

The Chinese government needs to further the reform, especially in the financial area, he said.

Daniel Gros, director of the Brussels-based Center for European Policy Studies, said the transformation of China's growth model from investment-driven to consumption-driven is long and arduous work.

China should improve its social insurance system to increase people's sense of security and promote consumption, he said.

PROMOTING REFORMS

On the development of the Chinese economy, observers have also raised a series of questions about the role of market, competition and private consumption in the future.

A well-coordinated relationship between market and government is just one of the top priorities for the new Chinese government, as Premier Li called the relations between government, market and society "key in reforming the economic system."

On Wednesday, the Chinese government said it has revised an investment list and eased administrative procedures to reduce its intervention in the market.

Amendments to a government-approved investment list were discussed at an executive meeting of the State Council presided over by Premier Li, according to a statement released after the meeting.

The old list from 2004 no longer meets economic, scientific and technological needs, the statement said, adding that revisions are necessary to enable the market to play a more important role.` Following the amendments, projects with sufficient market activity which are in line with the structural readjustment need only be reported to the authorities, instead of requiring government approval.

Reduced government approval and intervention will not only give enterprises more say in investment, but also give the government more time to manage affairs that truly call for management.

The arrangement will also encourage fair competition, avoid unchecked construction, and reduce idle capacity.

With a population of nearly 100 million living below the poverty line, China still faces issues such as imbalanced development in different areas.

Wang Tao, chief economist at UBS Securities China, said a solution to the long structural challenges lies in whether the latest round of reforms could unleash new potential for the Chinese economy.