Slowdown tests China's growth and reform

Li is confident that the economy has "potential and resilience" and can be kept under control. The 2014 growth target remains around 7.5 percent.

"The growth we want brings real benefits to the people, raises the quality and efficiency of economic development, conserves energy and protects the environment," he said.

Structural reform means stabilizing growth. "Reform will only be prioritized when growth stays within a proper range. If the economy moves outside that range, growth will be prioritized," said Shen Minggao, Citibank China chief economist.

Last week's producer price index (inflation at the wholesale level) contracted 2 percent year on year in February after dropping 1.6-percent in January. The index has been in deflationary territory for 24 consecutive months, and a looser monetary policy is quite likely, said Xu Binbin of Minmetals Futures.

In Xu's opinion, by predicting 13 percent growth in M2 this year, a broad measure of money supply, the government could hardly be seen as tightening their policy. "The message is clear, structural reform goes ahead on the condition of stable growth," Xu said.

Wang Tao, UBS economist, played down the worries: economic indices are still within an acceptable range, and the 7.5-percent growth target is likely to be reached. If recoveries in developed economies continue, external demand will increase.

Shen Minggao worries that growth of 7.5 percent will hinder reform. Credit risk in the financial market may not be mitigated soon enough, and slashing over-capacities and deleveraging means the growth target might not be achieved.

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