POSITIVE DEVELOPMENT

Fortunately, the economic drag on the Chinese economy has not been so significant, and the strength of the global economy and exports has offset the slight slowdown of Chinese domestic demand, noted the senior international economist.

China's trade with the United States, the EU, Japan and the ASEAN rose 2.4 percent, 8.5 percent, 1.6 percent and 1.2 percent respectively in the first four months of 2014.

"It is unambiguously good news that the U.S. economy seems to be picking up some steam," said Lipton, former senior director for international economic affairs at the National Economic Council and National Security Council at the White House.

Europe is registering a "tentative" recovery, but some emerging market countries are seeing slower economic growth. Despite day-to-day economic data fluctuations, the U.S. economy is gathering strength that is good for the global economy due to greater demand for exports including those from China, according to Lipton.

However, he cautioned, "That doesn't come without risk. As the U.S. economy recovers, the Fed is more likely to carry on its normalization of interest rates and the monetary policy which is very accommodative. That is a process that may have ramifications for financial markets and for capital flows."

Since the onset of the financial crisis, the U.S. central bank has kept its short-term interest rate at a historically low level and rolled out three rounds of quantitative easing programs involving purchasing longer-term government debt and mortgage-backed securities to bolster lending and economic growth.

Overall, Lipton said, the combination of a recovering U.S. economy and normalization of the Fed's monetary policies is a positive development for the world. But for many countries, there will be financial market consequences as U.S. interest rates rise and as volatility returns to markets. It's a "meaningful challenge" for many emerging market countries.

"It's less of an issue directly for China, because China's capital account is not as open as other countries', and China's economy is not as vulnerable to swings of portfolio flows. But if other emerging market countries have difficulties, there may be indirect effects for China," he stressed.

Speaking at a press briefing held in Beijing on Thursday, Lipton said that China depends on the rest of the world, and China's economy affects the rest of the world.

An IMF delegation led by Markus Rodlauer, deputy director of its Asia and Pacific Department, visited Beijing, Shanghai and Shenyang from May 22 to June 5 to discuss the annual Article IV review of the Chinese economy.

"The improving global outlook should support exports during the second half of the year. This will help compensate for slowing domestic demand that, in part, reflects a welcome moderation in credit and investment growth," the IMF said in a statement released on Thursday.