The year 2009 has witnessed China's economic success against the backdrop of the global financial crisis. With the ongoing annual session of the National People's Congress (NPC), the country's top legislature, the Chinese economy is under intense scrutiny these days, both from domestic and overseas economists.

Despite the achievements, China still faces daunting challenges in the coming months, and this year's NPC meeting may prove to be more substantive than past ones, said a foreign expert.

Economic performance

"The Chinese economy gave a good answer to the world last year," said Justin Yifu Lin, senior vice president and chief economist of the World Bank.

In Lin's opinion, the Chinese economy stood out among other economies last year and has become one of the engines of the global economy. He attributed China's achievements to three reasons: a strong and timely fiscal stimulus policy, domestic arena for government investment, and a huge market.

China registered a growth rate of 8.7 percent in 2009 while the world economy contracted 2.2 percent than the previous year.

"It was not at all easy for our country," Chinese Premier Wen Jiabao said in his government work report Friday.

Wen deemed the year 2009 as the most difficult one for China's economy since the beginning of the new century.

Nevertheless, the performance of the Chinese economy has won applauses from overseas economists.

"China has not only realized its own economic growth, but also boosted the confidence of other countries to deal with the financial crisis, giving an impetus to the world economic recovery," said Hong Pingfan, chief of the global economic monitoring center of the UN Department of Economic and Social Affairs (DESA).

Bernard Dewit, chairman of Belgian Chinese Chamber of Commerce, also voiced his approval for the Chinese economy.

It is very positive that a country like China could maintain a growth rate of 8.7 percent, Dewit said.

The growth would not only improve the Chinese people's livelihood, but also help foreign enterprises to continue to earn profits on the Chinese market.

According to Marcio Pochmann, chief of Institute of Applied Economic Research in Brazil, the Chinese government has been playing a great role in coordinating responses to the crisis.

Countries that were more capable of coping with crisis and emerged from it were those with an organized government and adequate public policies in the moment of crisis, Pochmann said.

Upcoming challenges

Despite the achievements over the past year, China's economy still faces grim challenges.

Hong said China faces dual challenges in 2010 as it interacts with rich nations eager to pass along the burdens of the crisis and the side effects of a massive stimulus package.

Under mounting pressure from the expected slow economic growth and worsening fiscal conditions, some of the leading countries will by all means try to shift off the burdens incurred by the crisis to other countries, among which China will likely to be a major target, Hong said.

Yet China has its own problems, he said. In 2009, China's aggressive policies and measures boosted investment yet failed to spur enough domestic demand. As a consequence, the heavy government spending has ballooned credit loans, and would cause potential asset bubbles, he added.

Hong's opinion was echoed by Lin, who said global economic recovery remains fragile, while domestically, asset bubbles are likely to emerge with the continued heavy investment in China.

Duncan Freeman, researcher of Brussels Institute of Contemporary China Studies, said one of the fundamental problems in China and its relations with the rest of the world is the imbalances that exist, notably the imbalances in trade with the United States and Europe.

Rebalancing the Chinese economy is a priority in resolving these imbalances with other nations, he noted.

Asian Development Bank economist Park Cyn-young also expressed his concern over trade disputes.

Given that China is achieving a spectacular growth, while the more advanced economies continue to suffer, it's likely that people will see rising trade disputes over the course of this year, he warned.

"Most importantly I think the Chinese will have to find if possible the delicate balance between the effect of the market forces and the possibility of government intervention," said Kenyan scholar Prof. Edward Oyugi.

Adopting appropriate policies would help China sustain fast growth, accelerate job creation and balance trade with African economies, Oyugi said.