At the recently held 2012 China Development Forum, sponsored by the Development Research Center of the State Council, leading economists and government officials from around the world took the pulse of China's economy and explored ways for the country to achieve sustainable development.

Participants said the global economic situation might have been even worse had it not been for China's steady growth.

Lagarde: China to play a bigger role

Christine Lagarde, Managing Director of the International Monetary Fund, said given the fragile prospects for global economic development, China's contribution has become more prominent. China should play an important role in global policy discussions while making efforts to accelerate its economic transition, she said.

China should not only continue to support growth, but also shift the drivers of economic growth away from investment and exports toward domestic consumption, she added at the 2012 China Development Forum. Moreover, household livelihoods should be improved so that citizens may all share in the dividends of high and sustained growth, she said.

"I am encouraged that the government has embraced these goals, reflected in the comprehensive policy agenda in the recent 12th Five-Year Plan," she said.

China's economic takeoff has caught the world's attention, Lagarde said, noting that the world is surprised whenever China breaks growth records year after year. Over the past three decades, China has created 370 million job opportunities and lifted 500 million out of poverty. After the outbreak of the financial crisis, China was the first among the Group of 20 major economies to launch economic stimulus policies.

"Indeed, the global economic situation might have been even more calamitous had it not been for the impetus that China provided to growth and stability," she said.

Herd: Opening up China's capital markets

Richard Herd, head of the China desk at the Organization for Economic Cooperation and Development, said 2012 is a year of pivotal importance when BRICS nations (Brazil, Russia, India, China and South Africa) will take an increasing proportion in global production. While the growth of BRICS nations' output is expected to slow down in the next decade, their momentum will persist. As they continue to grow, their economic structures will change, leading to a systematic reform that will have a major impact on these economies, he said.

The forthcoming reform will take place in capital markets, Herd said. Long-term estimates show China's savings will account for 42 percent of the world total by 2020. If this cash flow can be fully utilized, it will serve the interests of not only the Chinese economy but also the global economy, he said. As the renminbi is used in cross-border settlement, changes will take place in China's capital markets, making it more internationalized. An increasing number of foreign asset holders will be able to hold Chinese assets, and the renminbi will play a bigger role as a reserve currency, he said.

In the future, China will rely more on domestic demand to stimulate economic development. Economic restructuring, including reform of the exchange rate regime, will contribute to China's prosperity and development, he added.

Zheng: Valuing social development

Zheng Yongnian, Director of the East Asian Institute of the National University of Singapore, said there are three reasons why China's economic restructuring has not delivered expected results despite years of efforts.

First, an underlying cause of sluggish domestic demand and low consumption is the imbalance between state-owned enterprises and private enterprises. Today in China, private companies are either seeking the patronage of state-owned enterprises or investing their capital overseas. Under these circumstances, it is almost impossible to carry out reforms in state-owned enterprises. Zheng said that while he opposed the privatization of the entire economic system, he believed the public sector should be "put into a bird cage" and restricted.

Second, inconsistencies between economic and social policies have caused an imbalance between the economy and society. Many sectors where market-oriented reforms are needed have yet to embrace market forces, whereas market forces have been introduced into social sectors that should not be marketized. Economic policies should not be recklessly implemented in social sectors, Zheng said.

Third, there is an imbalance between the state and society. The government will not be able to come up with an effective solution without public support, so it should transfer power to society and the business community. Unless social forces are mobilized, the government's plans will hardly be put into practice, Zheng said.

Roach: Rebalancing China's economy

Stephen Roach, a professor with Yale University, said China's economy, like the world economy, needs rebalancing to avoid severe instabilities. Crises over the past 30 years have mostly resulted from imbalances, he said.

In the past, China's growth relied heavily on external demand, especially demand from the developed world. This model, however, is unsustainable and will not keep China on a historic growth trend. China must switch from external demand-driven growth to growth powered by domestic demand. Progress has been made since China adopted the 12th Five-Year Plan (2011-15) a year ago. Roach said he does not think China will be hit with a hard landing.

U.S. politicians have launched a new round of smear campaigns against China, Roach said. The rhetoric becomes increasingly loud when it comes to U.S. unemployment. At a time when it is difficult to achieve growth, the United States has much to discuss with China. It also has to solve a lot of problems on its own, the most important one being low savings in the context of a huge current account deficit and a large trade deficit, he said.

The United States runs a trade deficit not only with China, but also with 87 other countries across the world, because it does not have enough savings. It has no reason to blame China for doing just the opposite, Roach said.