Coming Soon: China's Growth Resurgence?

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Faced with the risk of a hard landing earlier this year, China's economy is now in the midst of a robust rebound, prompting economists to make bullish forecasts for growth in the new year.

A handful of recent upbeat data appears to be setting up the world's second largest economy to once again become a driver of global growth. On Friday, a preliminary private survey suggested that manufacturing activity had picked up speed in December.

The HSBC's Flash Purchasing Managers Index (PMI) rose to a 14-month high of 50.9, driven by a rise in new orders and employment. A reading above 50 indicates that growth is accelerating, while one below 50 shows slowing growth.

(Read more: China HSBC December PMI Hits 14-Month High)

"This (data) is above consensus and sustains an upward trend in mood. Clearly, growth momentum is improving," Dariusz Kowalczyk, senior economist at Credit Agricole, wrote in a note.

The latest PMI data comes on the heels of other positive indicators including a bigger-than-expected rise in industrial production and retail sales in November. All this has shifted the rhetoric on China, which has seen its economy grow at multi-year lows in 2012, heightening fears that the country was headed for a steep downturn.

Over the past two months the appearance of green shoots in the economy has led to a more optimistic view on its growth outlook.

Kowalczyk, for example, thinks the economy is on track to exceed the government's growth target for this year and next, predicting growth of 7.7 percent and 8.5 percent in 2012 and 2013,respectively, helped by an increase in investment and domestic consumption.

While Beijing has yet to set an official target for next year, it is widely expected to uphold its current goal of 7.5 percent to maintain continuity after the leadership transition is completed in March.

Kowalczyk, who in fact expects growth to accelerate to almost 9 percent in the very first quarter of next year, is one of many economists expecting the country's GDP growth to accelerate to the mid-8 percent level next year – not seen since the last quarter of 2011.

(Read more: China 2013 GDP Growth Seen at 8%: State Think Tank)

Qu Hongbin, chief economist,Greater China at HSBC, expects GDP (gross domestic product) growth at 8.6 percent next year, as strength in the domestic economy helps to offset weakness in key trading partners U.S. and Europe.

"Easing measures have already started to filter through, lifting infrastructure investment, which will likely be sustained in 2013. Infrastructure investment growth has been accelerating since the summer, almost completely offsetting the weakness in manufacturing and property investment," he wrote.

The current growth of infrastructure investment – over 25 percent year-on-year – is outpacing the 21 percent year-on-year increase in total fixed-asset investment, and is likely to speed up further in the coming quarters, according to HSBC.

Earlier this year, Beijing approved infrastructure projects worth more than $150 billion to support growth.

Raymond Yeung, senior economist,Greater China, ANZ, who sees growth rising to 8.1 percent in 2013, said an increase in household consumption – which currently accounts for around 35 percent of GDP - will also help power the economy next year.

"The outlook for 2013 should be very positive. Wage growth should continue to accelerate and help boost consumption. There will be ongoing reform for rebalancing the economy towards an increase in private household consumption," Yeung said.

China has seen significant wage growth in its coastal areas, and this is expected to spill over into second and third tier cities next year, he said. Wage income for urban households rose 9.8 percent in the first three quarters of the year.

Risks Remain

However, the country's growth outlook is not without risks, said analysts, pointing to the uncertain external demand environment, given the slowdown in Europe, which could dent its export recovery. China's exports grew just 2.9 percent in November from a year earlier, missing market expectations for a rise of 9 percent.

However, with China's economy less export-dependent than it used to be, economists said strong domestic demand will uphold the country's recovery.

(Read more: China's Exports Disappoint, but Won't Derail Recovery)