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We can breathe a sigh of relief on China: Economist

China seems to have avoided the worst scenario that rattled investors earlier this year, Bank of America Merrill Lynch's Helen Qiao said Wednesday.

"In the short term ... China is probably quite some time away from what people were so worried about in January and February," BofAML's chief economist for greater China told CNBC's "Squawk Box."

"People, at that time, were too overwhelmed by the worries China could be deleveraging too quickly ... [and hit] a hard landing in the economics." Looking at the climate in March and into April, "we're seeing actually more and more investment going through."

The trade picture in the world's second-largest economy staged a turnaround in March, with data Wednesday showing exports rising at the fastest clip since February 2015.

While the International Monetary Fund this week downgraded its world economic growth forecast yet again, the organization actually nudged China's growth forecast slightly higher.

"In the short term, we're seeing releveraging momentum, especially going into the second quarter," Qiao said. "[But] from a medium- to long-term perspective … China is probably trapped in this downward channel, where growth is continuously going to disappoint and go down."

China is scheduled to release first quarter gross domestic product figures this week.

A moderate slowdown in growth is expected in the first three months of the year — with a Reuters poll of economists calling for a 6.7 percent year-over-year expansion, compared with the 6.8 percent reading in the fourth quarter 2015.

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