A series of recent disappointing economic data in China has revived discussion about whether the central government should launch stimulus measures to spur growth in the slowing economy.

China's GDP grew 7.4 percent in the first quarter from a year earlier, below the annual growth target set by the government in March. It was also the slowest quarterly growth since the third quarter of 2012, official data showed Wednesday.

The country's exports fell 6.6 percent in March from a year earlier, following a decline of 18.1 percent in February, customs data showed last week.

The producer price index (PPI) also dropped for the 25th consecutive month in March, falling 2.3 percent year-on-year.

Despite the weak economic data, Premier Li Keqiang said on April 10 at the opening ceremony of the Boao Forum for Asia in Boao, South China's Hainan Province that the country will not resort to short-term stimulus measures to boost the economy, ruling out the possibility of any strong measures to raise GDP growth.

Li also suggested that as China had set an annual economic growth target of around 7.5 percent, there is room for fluctuation.

A growth rate a bit higher than 7.5 percent or slightly lower would still be within a reasonable range, so long as there is sufficient employment and no major fluctuations, Li said.

"The incumbent government has proposed a concept of a reasonable growth range. With that in mind, it will not rush to unveil stimulus but rather focus on tackling structural problems that impede long-term healthy economic growth," Zhuang Jian, a senior economist with the Asian Development Bank, told the Global Times on Monday.

Help expected

Despite Premier Li's words, there have been market expectations of further stimulus to shore up the economy, especially following the recent announcement of pro-growth measures.

Earlier this month, the State Council, the country's cabinet, announced a cut in taxes for micro and small-sized firms, as well as plans to renovate rundown areas and speed up construction of railway lines.

On April 9, Sheng Guangzu, general manager of China Railway Corporation (CRC) said that China would increase railway fixed-assets investment to 720 billion yuan ($117.09 billion) in 2014.

The moves have been interpreted by the market as a sign that larger stimulus measures will follow to aid the faltering economy.

"Private companies, especially micro- and small-sized firms, are having a difficult time. They cannot raise finance and their sales are declining. Tax breaks are more than enough to address the plight facing these firms," Zhou Dewen, vice president of the China Association of Small and Medium Enterprises, told the Global Times on Monday.

"The market has strong expectations for growth stabilizing measures. Many investment institutions have begun buying stocks related to real estate, cement, railways and the power grid," Li Huiyong, chief economist at Shenyin & Wanguo Securities in Shanghai, said in a research note on Tuesday.

Damaging side effects

"Many side effects of the large stimulus plan launched in 2008 have not yet abated, such as outdated industrial capacity that contributes to pollution. It is not likely the current government will roll out new stimulus [as that would] aggravate these problems," Zhuang said.

China unveiled a massive stimulus plan worth 4 trillion yuan in 2008 in response to the global financial crisis, and it helped protect China's economy against a sharp slowdown.

However, there has been criticism about the side effects of the plan, such as inefficient investment and an increase in industrial overcapacity.

"I already warned in 2009 that the government should not resort to stimulus but rather let insolvent firms go bankrupt. Only under these circumstances can Chinese entrepreneurship be nurtured," said Zhang Weiying, a professor at Guanghua School of Management at Peking University, at a session of the Boao Forum for Asia on April 10.

"Demand management by the government will inhibit entrepreneurship and mislead entrepreneurs into making the wrong decisions," Zhang said.

Chen Zhiwu, a professor of financial economics at Yale University School of Management, said at the same session that China needs to find ways to reverse the long-term structural damage from the stimulus plan.

However, Li Daokui, a professor at the School of Economics and Management at Tsinghua University, told news portal sina.com.cn on Tuesday that the launch of the stimulus plan was the right thing to do at the time, but there is room for improvement in how the stimulus is carried out.

"The global financial crisis in 2008 was the worst in a century and no one knew what would happen. The then leadership needed to act to stimulate the economy," Zhang Bin, a research fellow at the Chinese Academy of Social Sciences (CASS), told the Global Times on Sunday.

"Problems occurred when many pro­jects received hasty investment without good planning, creating waste and overcapacity," Zhang said.

New direction and hope

With the economy facing downward pressure, the government needs to take some growth-enhancing measures to bolster growth, Zhang Yongjun, a research fellow at the China Center for International Economic Exchanges, told the Global Times on Sunday.

"Unlike before, the incumbent government is adopting mini-stimulus measures. It prefers to use market forces and reforms to bump up the economy rather than stimulus, and uses measures such as tax breaks and financial reforms to increase both demand and supply," Zhang said.

"Last year when the economy continued to slow down and the government did not use strong stimulus to revive the economy, employment still remained fine. That means the government can still ensure sufficient jobs without major stimulus," said Zhuang of the Asian Development Bank.

"In the future, the country should focus on developing its service sector and modern emerging industries to create jobs," Zhuang noted.

"The incumbent government is more cautious about using pro-growth measures. The internal and external economic situation is not so bad that the government will use large stimulus to pump up growth," said Zhang of the CASS.

"Taking trade for example, the US and European economies are gaining steam and China's trade data will not be too discouraging in the future," he said.

On Monday, the WTO raised its forecast for global trade growth in 2014 to 4.7 percent, up from its previous prediction of 4.5 percent.