China Slowdown Is Certain, but Analysts Differ on How Much

China's better than expected GDP growth of 8.9 percent in the fourth-quarter is unlikely to last, a number of analysts told CNBC, with the disagreement between the bulls and the bears now resting on how much of a slowdown the economy will experience in 2012.

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Steven Xu, Director at The Economist Corporate Network, said he was surprised by the strong fourth quarter number, but was sticking to his view that the economy would slow to 8 percent in 2012 compared to 9.2 percent in 2011.

"8.9 percent GDP growth is not going to change the reality — reserve requirement ratio will be cut massively throughout the year," Xu said.

Marc Faber, a China bear and the editor of the Gloom, Boom & Doom Report went so far as to question the authenticity of the GDP data. "I question any number that is published by governments, not just in China, everywhere in the world," he told CNBC on Tuesday.

Faber said further easing by China's policymakers would only exacerbate the economy's problems. "We have huge excesses, we have excessive credit growth in China and the excesses and the misallocation of capital — in my opinion — will become only worse," he said.

Some investors have speculated that China’s economic growth in 2012 could slow to near 7 percent, a scenario that’s expected to lead to a "hard landing," while those who are bullish expect growth to remain between 8 and 9 percent in 2012.

Alistair Thornton, Analyst at IHS Global Insight, said that while a 7 percent growth rate may seem respectable to the rest of the world, in China's context it could be catastrophic. He points out that between the third quarter of 2008 and the first quarter of 2009, growth slid from 9 percent to 6.1 percent, leading to reports of around 20 million unemployed migrant workers roaming the countryside.

"Should China slide to 7 percent in 2012, it would likely be accompanied by significant dislocations in the export and property sectors, and could set in motion a negative growth spiral," Thornton added.

Too Pessimistic?

But many analysts still expect China to avoid such a fate. According to Chris Probyn, Chief Economist at State Street Global Advisors, the latest numbers further bolstered the case for a soft landing and for growth of around 8.5 percent in 2012. "Just about everyone, now believes that we can avoid a hard landing," he said.

Geoff Lewis, Head of Investment Services at J.P. Morgan Asset Management, said international fund managers have been too pessimistic in predicting a sharp growth slowdown. "There's been nothing in my view to support this in the data as it unfolded through 2011," he said.

"These were pretty decent set of figures as China's figures have been really for the last 12-18 months," Lewis said. "We're seeing that China is holding up."