China 'essential to European recovery' (4)

Robert Mundell, professor of economics at Columbia University, who is also a Nobel laureate, added he thought China's annual future growth would average 7 to 8 percent, rather than the 10 to 11 percent of recent years.

He said China should continue to ease monetary policy but refrain from cutting lenders' reserve requirements, relying more on increased consumption to offset declines in exports.

"The EU and US can do very little because of their shortages in demand, thus China is the only country which has the room for expansion in monetary supply," Mundell told the forum, adding China should allow wage increases to boost consumption.

However, Peng Wensheng, chief economist with the China International Capital Corp Ltd, said China's monetary policy is unlikely to become much more accommodative in 2013 because the growth momentum of the private sector remains weak.

"China's monetary stance may still be stable but fiscal measures will be more supportive," Peng said, adding that the government may increase its deficit level next year.

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