China's economy will grow by 8.5 percent in 2012, a think-tank has said.

It faces a significant downward pressure this year due to complicated situations, said Li Wei, Director of the State Council's Development Research Centre.

China's annual export growth is likely to slow to 10 percent from 20.3 percent in 2011, as the global economic outlook has been shadowed by slow economic recovery in the US and Europe's sovereign debt crisis, Li said Thursday.

He projected the country's fixed-asset investment to grow by some 20 percent, down by four percentage points from a year earlier, as the manufacturing and real estate sectors have been hit by slowing exports and curbing policies, respectively.

A moderate economic slowdown will help to curb inflation triggered by excess demand and also encourage more mergers and acquisitions, which will speed up the adjustment of China's economic structure, he said at a conference in Guiyang.

Once the potential economic growth rate begins a downward trend, expansionary measures cannot increase the growth rate but only lead to a "bubble" economy, Xinhua quoted him as saying.

Source :siliconindia.com