China will manage slowdown, says Australian bank chief

The Chinese government will be able to manage the slowdown of its economy to avoid a hard landing and maintain strong growth in the future, Australia's Reserve Bank governor said Monday.

But Glenn Stevens said the world's second biggest economy would have to find a new economic model that relies less on foreign demand for cheap exports and more on domestic demand for its own goods and services.

"The slowdown in Chinese growth -- from 10 percent to a mere 8 percent -- is a major talking point, and some see it as portending a major crash," Stevens told a conference in Hong Kong.

"But some slowing was required to reduce inflation and, therefore, put growth on a more sustainable path."

Chinese Premier Wen Jiabao told the National People's Congress -- the annual parliamentary meeting -- in Beijing this month that China would target 7.5 percent growth in 2012, well below the 9.2 percent recorded last year.

The slowdown, which sent jitters through global markets, comes as China's exports are buffeted by weak demand from the United States and crisis-hit Europe.

Australia was the only developed economy to avoid a recession after the 2008 global financial crisis, largely thanks to Chinese demand for its minerals needed to maintain its massive construction boom.