China's economy is slowing, but not necessarily in a bad way.
The latest official statistics declared the country's 2011 Q4 growth the slowest in 10 quarters at just 8.9 percent, and the whole year GDP growth stood at 9.2 percent.
The downshift was partly caused by economic crises in Europe and the U.S., but was also desired by policymakers who sought to cool down the country's property market.
China's economy seems to have been forging ahead forever: it expanded by 9.2 percent in 2009, 10.4 percent in 2010 and 9.2 percent in 2011, when the West was struggling to avoid a recession.
But no growth lasts at such dizzying speeds. For the reform-minded economic architects in China, slower, more balanced growth may bring about a happier ending.
Even when the Chinese engine is downshifted, it still has the power and potential to drive the world economy. Those who expect a hard landing or even a meltdown of China's economy this year will be quite disappointed.
With a population of 1.3 billion, China will not see its demand for investment and consumption drying up in the foreseeable future, helping to offset export slumps.
Mounting local government debts are worrisome, but far from being a life-or-death issue. Taking into account contingent liabilities for which local governments serve as guarantors, the ratio of all those debts to local government fiscal revenues was 70.45 percent at the end of 2010, still well below the 100-percent alert line, according to national audit results.
The downward trend in the property sector is expected to continue, but with high down payments for home loans and large-scale subsidized housing projects, its impact on the financial system and fixed-asset investment growth will be controllable.
Internal growth momentum will give policymakers the confidence to continue restructuring the economy. Meanwhile, outside observers wondering about China's next stimulus package or credit profligacy should be prepared for a slower China, albeit a healthier one.
One clue can be found in the text of the government's 12th Five-Year Plan (2011-2015), which sets the annual economic growth target for the period at 7 percent, a sharp contrast with the average annual growth of 11.2 percent seen during the 2006-2010 period.
On one hand, the global financial crisis has raised awareness about the risk of over-relying on exports. Massive fixed-asset investment designed to cushion China against falling external demand was not a cure-all, either, as it made the inflation tiger hard to tame and increased environmental pressures.
On the other hand, it will take time to advance reforms and make the Chinese economy less dependent on exports and investment; a growth rate similar to what China is used to is unlikely during this transitional period.
The unleashing of China's long-term growth potential also demands deepened reforms, including lowering industrial thresholds for private businesses, creating a fair and competitive environment for talented people and bridging the urban-rural gap.
Around this time 20 years ago, late Chinese leader Deng Xiaoping gave impetus to and invigorated the country's economic reforms with the remarks he made during his famous inspection tour of south China.
As China faces another transitional moment today, carrying reforms forward will once again prove to be a boon for the country and the world at large.