Moody's says China avoids hard landing, needs reforms

An employee works on a steel production line at an export factory in Dalian, Liaoning province, February 8, 2013.

REUTERS - Moody's Investors Service on Wednesday said China's economy had dodged a hard landing and was recovering well, though future growth would depend on making more progress on structural reform.

In a report on the world's second largest economy, Moody's said recent data pointed to a rebound in economic activity and suggested growth should climb to the upper half of the 7.5 percent to 8.5 percent range it previously forecast.

"The Mainland's new leadership looks committed to financial-sector, fiscal and structural reforms, and the orderly transition to the country's fifth generation of political leaders has reduced uncertainty for investors," the ratings agency said.

Yet it also warned that unchecked non-bank credit growth could endanger the soundness of the banking system and in turn the economy. (Reporting by Wayne Cole)