Amid growing talk that China may take steps to stimulate a slowing economy soon, the country's vice finance minister told CNBC that Beijing would be careful not to repeat past mistakes.
Last week, China's Premier Li Keqiang said the government should roll out measures as soon as possible to stabilize growth and boost domestic demand, China's state news agency Xinhua reported.
Vice Finance Minister Zhu Guangyao told CNBC in an exclusive interview on Sunday that authorities would take a cautious approach and was mindful of the negative impact stimulus has had on the economy in the past.
"We don't want to repeat some mistakes before [that] we've made," said Zhu, adding that in the past China had stimulated "too much" and this had hindered sustainable economic growth.
China pumped billions of dollars' worth of stimulus into the economy following the global financial crisis in 2008 in a move that many economists say contributed to problems such as inflation and over capacity.
(Read more: China moving closer to unleashing fresh stimulus)
Zhu said growth had been too high back then and today the focus was more on achieving "quality" growth, an objective Beijing planned to achieve through increased investment in environmental protection and infrastructure building, especially in more remote and poorer areas.
"We think a 7 to 8 percent growth rate is in line with Chinese economic potential and in line with our real capacity," he added.
At the National People's Congress meeting this month Chinese leaders said there was some flexibility around the 7.5 percent gross domestic growth target for 2014.
The flash HSBC Purchasing Managers' Index (PMI) on Monday showed China's manufacturing activity contracted for a third straight month in March.
Worries over the health of the Chinese economy have been exacerbated in recent weeks by the country's first corporate bond default.
(Read More: Is China's bond default thetip of the iceberg?)
Asked whether China would accept more defaults in the future, Zhu said such incidences would be determined by the market.
"[It's] not the government [that] decides, the market decides," he said.
"We must balance the moral hazard issue and how to make real reforms, to take away the risk of bubbles bursting and causing some systematic impact. We must rebalance that," he said.