Also during an inspection tour over the weekend, Vice-Premier Li Keqiang said that domestic demand and balanced growth were the way forward for the economy.

"China should stick to the general principle of seeking growth while maintaining stability and strive to expand domestic consumption in order to stabilize economic growth," Li said in Central China's Hubei province.

He said China should expand consumption and restructure the economy by structural tax cuts, stimulate consumption and encourage and guide private investment.

The country should also nurture emerging industries and transform outdated production methods to those of better quality, Li said.

To buoy the economy, China has adopted a string of pro-growth measures, including lowering the reserve requirements of banks to boost lending, subsidizing energy-saving household appliances and speeding up approval for major construction projects.

In its latest move, the central bank cut the benchmark interest rate for the second time in a month to inject liquidity into the market.

However, economists are calling for measures other than financial and fiscal incentives to restore growth.

"When the economy is slowing down, company demand for money also declines," said Xu Xiaonian, an economist and finance professor at the China Europe International Business School.

"Loosening monetary policy now is like watering the plant when it's raining.

"The right medicine is to create new investment opportunities, break monopolies, relax government control, protect intellectual property and boost private investment," Xu wrote on his micro blog.

Fan Jianping, chief economist at the State Information Center, said cutting tax is the best way to boost consumption.

"The key to expanding consumption is tax reduction and distribution reform," he said.

Apart from cutting income tax, Fan called for further reform of value-added tax to lower the prices of consumer goods, and end the phenomenon of "Made in China" goods sold even cheaper abroad than in the domestic market because of export tax rebates.

Meanwhile, Fan said, any new incentives should not bring about further inflation or appreciation in housing prices.

Tang Jianwei, an analyst with the Bank of Communications, said China's economy is at a crossroads.

"To improve productivity requires higher efficiency and technical upgrades," he said.

"Therefore, in the long term, the key to open a new era for sustained growth is to widen the access for private capital to stimulate private investment."