China's economy is in transition from an industrial economy into a post industrial economy where both international and domestic markets can no longer support high speed growth of industrial sectors, state-run Global Times quoted a report by Chinese Academy of Social Sciences (CASS).

China is facing the possibility of being trapped by "economic transition syndrome," which means a vicious cycle of weakening of internal driving force for growth, demand for stimulus policies and increasing financial fragility, the Yellow Book of World Economy released by CASS said.

Mismatch between demand and supply is enlarged due to over-regulation in service sectors, causing the economic drive force to weaken, it said.

The report came as increasingly polarised views were voiced about China's economic prospect with some remaining sanguine, some expecting a more balanced economy and others concerned about a hard landing.

The report came as an economic conference attended by Chinese President Xi Jinping and other leaders here on December 11 said that China faced mounting pressures created by decelerating economy and admitted the big "downward pressures".

It promised to deepen reforms in nine areas including capital market and market access for private banks to spur growth.

Economy still faces many challenges and "relatively big" downward pressures such as increasing difficulties for businesses and the emergence of economic risks, the Central Economic Work Conference (CEWC) said.

It said that China should settle down to face the "new normal" of slow growth. The economy will actively adapt to the economic "new normal" of slower speed but higher quality, the conference said.

Commenting on the CASS report Wang Jun, an economist at the China Centre for International Economic Exchanges, a Beijing-based think tank said, "I remain cautiously optimistic about China's economic outlook next year. Indeed China's economy is slowing but it is not falling below a dangerous level and still grows at a reasonably fast speed."

"But compared with  US, China's GDP per capita, technology, innovation ability, financial sector as well as military power still lag behind," Wang told the daily. The report came as a slew of recent economic indicators showed the country is going through a rough patch.

Economic growth has slipped to 7.3 percent in the third quarter from a year earlier, and November's weak manufacturing, factory and investment figures suggest annual growth may not hit 7.5 percent.

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