China faces systemic risks: BAML

The cash-rich Chinese government was able to deal with such risks individually,but the path of addressing the issues could be bumpy,he added.

Cui said a meltdown in the property market could be the biggest trigger for a hard landing in the world8217;s second-largest economy,although such risks remained modest.

Our central case is still a soft landing,but we cannot rule out the possibility of a hard landing,he said. A hard landing in China typically means a sudden slowdown of annual economic growth to 7-8 percent.

China8217;s average housing prices could fall by 5-10 percent in the next few months,but the government was likely to reverse its tightening campaign targeting the property sector,he said.

September or October could be a watershed for the property sector. The number of people not expecting housing prices to rise may have reached a critical mass,Cui said. We are unlikely to see a U-turn in the government8217;s tightening policy any time soon.

China would unswervingly maintain property curbs for the rest of the year as it fine-tunes macroeconomic policy,China8217;s cabinet said on Saturday.

Property prices in key Chinese cities have risen ten-fold in the last 10 years,fuelling a speculative bubble and public discontent as prices have risen far beyond the reach of ordinary people.

Following a slew of measures by Beijing8217;s leaders since late 2009 to rein in prices,residential transaction volumes have dropped since September and some developers have slashed prices for new developments in cities such as Shanghai.

A private survey earlier this week showed the average home price in China8217;s 100 key cities fell 0.23 percent in October from a month earlier .

Cui said investors in China were seeing a sharp decline in returns from the vast manufacturing sector and that,along with negative real interest rates,had fuelled a boom in wealth management products and underground lending.