News Analysis: "Hard Landing" Imminent in China's Economy?

The Consumer Price Index (CPI) was 5.3 percent in April, slightly down from March's 32-month high of 5.4 percent.

The central bank has raised the reserve requirement ratio (RRR) of commercial banks five times this year, and also hiked the benchmark interest rates four times since last October.

Market analysts expect another rates hike in June.

Zhang Yansheng, a researcher with the National Development and Reform Commission (NDRC), said inflation pressure would stay for some time, and enterprises should prepare for that.

Fan noted the slowdown momentum is a good thing since it is a necessary condition to tame consumer prices, and could also make way for economic restructuring.

The Chinese government is taking steps to change China's growth pattern to one based on innovation and domestic demand.

"In the days of fast growth, businesses felt good about their strategy. That has protected the outdated capacity," Fan said.

He said although the present slowdown is intended by the government and within control, the macro-policy should be forward-looking to avoid a real recession.

"The monetary tightening should fade before the price increase is curbed. Otherwise a deep slowdown will hurt the next round of growth," he said.