It is both necessary and possible for China to maintain a proactive fiscal policy this year, Chinese Finance Minister Xie Xuren said on Wednesday.

In a signed article published in the Qiushi Journal under the Central Committee of the Communist Party of China, Xie said that implementing a proactive fiscal policy was a significant decision as the country deals with a changing economic environment.

"There are many favorable conditions for the further growth of China's economy in 2012," Xie said, citing that China is stepping up the pace of industrialization, urbanization and agricultural modernization.

But China's economy also faces many challenges, Xie added.

Weakening external demand poses increasing difficulty for the country's exporters and the income gap between urban and rural residents was still relatively large, he said.

China is confronted with the arduous tasks of economic restructuring this year, and there are still many factors that may drive up prices, Xie said in the article.