China to see moderate recovery in 2013 (4)

"So, in other words, the recovery in China is not going to be an export-led recovery, but mainly a domestically-led recovery."

As to the inflation, Wang expected inflation to pick up from the fourth quarter this year, and rising inflation is mainly driven by another food cycle and rising prices of commodities and grain. She also predicted that the Chinese government will continue pushing forward some of the price reform, in such areas as utilities.

"So we expect CPI inflation to average at about 3.5 percent next year, compared to 2.7 percent this year," she said.

Wang also believed that there would be no more interest rate cut in the coming year. "If anything, we see a risk of possible interest rate hike in the second half of 2013, as inflation rises above 3.5 percent. The benchmark deposit rate right now is at 3 percent, so if the inflation rise above 3.5 percent, there would be a risk for interest rate increase," she added.

Recommended Features: Vibrant Opportunities amid Transition From 'Made in China' to 'Created in China' A Journey to Cultural Renaissance The Vision of A Pillar Industry [Video]A 'Made in China' Story A Splendorous Landscape of China's Wealth A Decade of Fastest Development Eastern Boom Lightens Western Gloom Chinese firms 'potential Trojan horses'？