The economy "is stabilizing" although it will remain under "downward pressure" in the coming months, a top official said in a briefing to the National People's Congress Standing Committee.

Zhang Ping, minister of the National Development and Reform Commission, also pledged more measures to "restore export growth" and "boost domestic demand".

There are difficulties facing the country's economic and social development both at home and in the global market, Zhang said.

It may take time for the economy to emerge from the turbulent patch, Zhang said.

Government efforts are taking effect, and growth is stabilizing slowly, he said but he did not speculate on when growth would rebound from a three-year low of 7.6 percent in the second quarter.

HSBC on Monday lowered its forecast for China's GDP growth in 2012 to 8 percent from 8.4 percent mainly due to export concerns.

Qu Hongbin, HSBC's China chief economist, said expectations of weaker-than-expected data will prompt the government to take more easing measures, which will lead to a recovery but the scale is likely to be modest.

But Zhang, the NDRC minister, said China's economic development is still on track, with favorable conditions such as the huge potential in domestic demand and room for ample policy incentives.

However, challenges allow little optimism for China's exporters, Zhang said, citing sluggish external demand and diminishing price advantages.

China's foreign trade picked up by 7.1 percent in the first seven months of the year.

Wei Jianguo, former vice-minister of commerce who is also a guest economist at China Daily, said he is concerned over whether the country can accomplish its trade growth target of 10 percent for the year.

Wei said that small and medium-sized enterprises have seen an export decline not only to Europe but also to emerging market economies.

"Conditions facing small exporters will be even worse next year if orders continue to dwindle," he said.

His words resonate among exporters. "Demand from European clients dropped dramatically in the first half of the year and there has been no sign of recovery during the peak summer season," said Zhang Rui, owner of Chuangsi Optical Spectacles in Wenzhou, a city in Zhejiang province known for its large number of privately owned companies.

Zhang Rui said that most of the Wenzhou-based trading companies have been struggling amid a general slowdown in the global market and are expecting to maintain, at best, only 40 percent of last year's profit levels.

Similar sentiments were aired by lawmakers at Wednesday's NPC Standing Committee meeting.

Liu Shoupei, a lawmaker from Deyang, Sichuan province, said a survey found about 40 percent of the 2,000 respondent companies in the local equipment manufacturing industry were suffering losses.

Finance Minister Xie Xuren vowed at the NPC Standing Committee meeting that more fiscal incentives will be rolled out, including quicker tax rebates and a new credit insurance.

Tang Jianwei, an analyst of macroeconomics with the Bank of Communications, said the consumer price index is likely to hit 2.3 percent year-on-year in August.

Contact the writers at weitian@chinadaily.com.cn and yuran@chinadaily.com.cn

Zhao Yinan contributed to this story.