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While China relies heavily on the world's biggest economy, it has lost its freedom and independence in policy making because the United States is able to control China via various means, such as anti-dumping and anti-subsidy probe, accusing China of foreign exchange rate manipulation, intellectual property protection default and labor use abuse.
"China has found itself in a passive position under attack. If we don't get rid of our overdependence on the United States, we will not be able to get out of the current predicament," Jiang said.
Compared with the long-term looming risks, the current economic downturn is the biggest obstacle that needs to be addressed. The growth rate of the Chinese economy has been declining for five consecutive quarters.
As long as there is no large adjustment and reform and the contradiction of overproduction is not resolved fundamentally, the trend will continue and will be difficult to revert, said Wang Jian, Vice President of China Association of Macroeconomic Research.
According to Wang, the problems that bother the Chinese economy could not be solved by fine-tuning macroeconomic policies.
"Minor reforms do not work. We need structural adjustment in the real sense that changes the intricate interest structure," said Wang Jian.
For Wang Xiaoguang, a researcher from the Chinese Academy of Governance, an advisory body to the Central Government, the best treatment for the Chinese economy is change in the growth mode through strategic adjustment to the economic structure.
"China started its economic restructuring several years ago, but its efforts did not pay off as expected. What we need to do now is to cultivate a macro-environment that encourages structural adjustment, self-dependent innovation and an energy-saving industrial system," said Wang Xiaoguang.
The BOC report called for fine-tuning of China's macroeconomic policy while insisting on an active fiscal policy and stable monetary framework.
"Fiscal policy should be more active with focus on optimizing the distribution structure, structural tax reductions and tax reform. Monetary policy should gradually loosen its grip while ensuring a reasonable market liquidity through deposit reserve ratio adjustment and open market operation," said BOC report.
Gloomy economic readings offer a "positive signal of encouragement" for further adjustment in the monetary policy.
"Today the slowdown of the GDP growth rate, eased inflation pressure, sluggish overseas demand and SME's financing difficulties all call for our monetary policy to be more effective," said the BOC report.
The BOC report claimed that special measures should be taken to prevent the decline in some major industries and projects.
"The country needs to issue more favorable policies to support the construction of affordable housing, railways, water conservancy and other infrastructure projects. In addition, the country should consider the possibility of reducing interest rates after the efforts of combating inflation pay off," said the BOC report.
The report said that the possibility of a sharp decline in the Chinese economy is minute. China will see a slight increase in economic growth in the second quarter, driven by improved external environment and the regulation and control of the Chinese Government. The report forecasts growth of 8.4 percent in GDP in the second quarter compared to 8.2 percent in the previous quarter, but a decrease of 1.1 percent compared to the same period last year. Meanwhile, China's consumer price index is expected to grow by 3 percent in the second quarter.
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