Recently, China introduced a series of measures including rate cuts and reductions in reserve requirement ratios, or the amount of reserves commercial banks are required to hold, in an attempt to ease monetary conditions.
"We are seeing some sparks, we saw a slight improvement in the April manufacturing PMI and we do think that a lot of the recent stimulus, including the benchmark interest rate cuts, are starting to feed through into an improvement in activity – we are also seeing a looser fiscal stance now," China economist at Capital Economics, Julian Evans-Pritchard told CNBC.
"We are optimistic that growth should at least stabilise, or downwards pressure on growth should at least should ease somewhat – but the long-run picture is on-going structural slowdown in investment and that is not going to reverse any time soon," he said, adding that in the next few years growth is set to slow further.
Senior economist at Oxford Economics, Adam Slater said while there had been a loosening of fiscal policy, the moves have "done little more than ameliorate what has been a rather significant overall tightening of monetary conditions over the last year or so," and current evidence pointed to decelerating growth.
"There are constraints on Chinese policymakers too. First, with significant deflation at the producer level, real interest rates have risen sharply and are now relatively high. Even if interest rates are slashed to the bone, China may still face a serious 'zero lower bound' problem," Slater said.