"There might be a certain degree of fluctuation in monthly figures, but the overall CPI growth will stay around 4 percent," he said.

Investment remains a pillar contributor to the macro-economy, said Qu Hongbin, chief China economist with the HSBC.

"China can use affordable housing and public welfare projects as a powerful buffer to offset the slowdown in private property," he said, adding that it has already begun.

Fan Jianping, a researcher with the State Information Center, agreed. "An expected slowdown in commercial housing construction will be compensated by the government's ambitious affordable housing plans," said Fan.

"Investments will remain supported by solid corporate profits and gradually easing monetary environment," said Lu Zhengwei, chief economist with the Industrial Bank Ltd.

"Infrastructure construction is likely to slow this year due to decreased spending on railways," said Lu. The Ministry of Railways recently announced that China plans to invest 400 billion yuan ($62.99 billion) on railway infrastructure construction in 2012, representing a slight decline from the 469 billion yuan ($74.1 billion) in 2011. "But massive input in water resources and energy development are already in the pipeline," he said.

Qu said a new driver will be the strategic emerging industries, including information technology and new materials. "A key target in the 12th Five-Year Plan (2011-15), was to boost those industries to account for 15 percent of GDP by 2015," he said.

In its Global Economic Prospects 2012 released on January 18, the World Bank predicted the Chinese economy will grow 8.4 percent in 2012 and 8.3 percent in 2013.

China is vulnerable to downturns in the United States and Europe, but a healthy balance sheet, slowing inflation and massive foreign reserves mean China can ease aggressively, if necessary, said the Bank of America Merrill Lynch, in a recent report.

The bank expected China to avert a hard landing and forecasts GDP growth of 8-9 percent in 2012.

"Affordable housing will be a crucial factor in restarting the growth engine. We don't doubt the Chinese Government's determination in building more affordable housing," said Lu Ting, a Hong Kong-based economist with the Bank of America Merrill Lynch.

Dong Tao, chief regional economist for non-Japan Asia at Credit Suisse, expected a soft landing in China as private consumption holds up because of salary increases, tax cuts and continued urbanization. He predicted quarterly growth in 2012 will be about 8-8.5 percent.

"If the economy weakens any further, we would expect future stimulus to be more focused on consumption than infrastructure. In the beginning, a fiscal stimulus would likely increase funding for affordable housing and provide consumption subsidies," he added.

Wang Tongsan, Director of the Institute of Quantitative and Technical Economics at the CASS, said China has better fiscal and financial resources than major developed economies, so it can avoid a balanced recession.

Wang expected this year's economic growth is likely to be 8-9 percent and CPI will be controlled within 4 percent.

This year's growth might be the lowest since 2003, but it would still be the world's fastest among large economies, said Wang.

Potential risks

The greatest risk for China this year is external, as the European debt crisis is likely to deteriorate, causing further pains for Chinese exporters, said Peng Wensheng, chief economist at the China International Capital Corp.

Wang Tao, chief China economist with the Swiss investment bank UBS, also struck a note of caution. Wang expected China's export growth to drop to zero in 2012, which would trim 1.4 percentage points off GDP growth, although she does not think the trade surplus will completely vanish in 2012.