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Update: Chinese Premier Li sees 'painful and treacherous' economic transition

Workers install car parts at their assembly line in a factory in Qingdao, east China's Shandong province on July 15, 2015.

[BEIJING] Chinese Premier Li Keqiang said Thursday that change in the world's second-largest economy is fraught with difficulties and uncertainty, but sought to reassure an international audience that the country does not threaten the global economy.

Chinese leaders are overseeing a transition in the country's growth model from the emphasis on exports and investment that saw it boom to a more sophisticated one in which consumer spending plays the dominant role.

"This is going to be a painful and treacherous process," Mr Li said in a speech to a World Economic Forum meeting in the northeastern city of Dalian.

"So ups and downs in economic performance are hardly avoidable", he added, calling that "natural" during a time of change.

Mr Li's comments came as Chinese policymakers have come under increasing pressure to reassure global investors concerned over perceptions the country's economic growth is slowing precipitously, which have helped fuel huge swings in global financial markets.

"China is not a source of risk for the world economy but a source of strength for global growth," Mr Li said, stressing that it accounted for about 30 percent of world economic expansion in the first half of this year.

China's GDP growth growth stood at 7.0 per cent in the first two quarters this year, but on Monday the government lowered its 2014 growth reading to 7.3 per cent, from the 7.4 per cent announced in January.

Mr Li acknowledged that the economy has "come under quite a number of difficulties and downward pressure" but stressed it remained in a "proper range", a favourite phrase.

But he also stressed that China was being affected by economic troubles elsewhere.

"China is an economy that is closely integrated with the international market," he said.

"Given the weak growth of the global economy, China cannot stay unaffected and the deep-seated problems that have built up over the years are also being exposed." Also resorting to commonly used wording, Li said that policymakers would be unmoved in the face of short-term movements in the economy, but stand ready to take action as necessary.

"If there are signs the economy is sliding out of the proper range we have adequate capability to deal with the situation," he said. "The Chinese economy will not head for a hard landing." China has set its annual target for growth in gross domestic product (GDP) at about seven percent for this year, down from last year's objective of around 7.5 per cent.

Mr Li stressed, however that given China's GDP now stands at more than US$10 trillion, growth of seven percent represents a total that "is even bigger than the double-digit" figures of the past, and remains one of the highest in the world.