"Whether savings can be transformed into effective investment to help stabilise growth has become a key issue," the ruling Communist Party's mouthpiece said, citing an unidentified "authoritative source".

The paper, which in recent months has run a string of articles to inform the public about the stock markets and the nation's economic outlook, is seen by investors as an important window on Beijing's thinking on policy.

Growth in the world's second-largest economy risks losing further steam after hitting a six-year low of 7 per cent in the first quarter, as excess capacity and financing bottlenecks have curbed investment in new infrastructure and property projects.

The latest economic data has failed to bolster confidence. The preliminary HSBC Manufacturing PMI, an overall view of activity in the manufacturing sector, stood at 49.1, suggesting further contraction. Fixed-asset investment grew less than 10 per cent in April, the lowest since 2003.

urged "high attention" on the downward pressures in growth.

"However, there's no need to panic," it added.

An acceleration or deceleration of one or two percentage points was not a cause to worry, the paper said, indicating Beijing was in no rush to significantly loosen liquidity to aid growth.

"Shrinking demand can hardly be boosted in the short term. Simply bearing the pain will not work. Relying on stimulus also wouldn't completely solve the problem," the article said.

"After all, we should rely on innovation, on transformation of the growth model and structural adjustment, so that we can resolve the problem and create new possibilities."

The PPP scheme is designed to help cover financing shortfalls facing local governments.

UBS Securities economist Wang Tao said China might need to expand infrastructure investment by 20 per cent this year to offset the ongoing property downturn. As a result, Beijing should carry out between 1.5 trillion yuan and 2 trillion yuan worth of infrastructure investment under the PPP scheme this year, in addition to policy banks' direct lending and traditional borrowing by local governments for ongoing projects through their financing arms, UBS said.

But Wang said simply listing the PPP projects might not be enough to attract private capital. The weak earnings prospects for most PPP projects and lack of legislation in the area might discourage private investors from signing contracts, she said.

This month, the NDRC approved 243.6 billion yuan worth of major infrastructure projects, while import tariffs on some products were lowered to spur consumption.

Beijing's desire for a so-called slow bull stock market is evident, as it would cut companies' reliance on bank lending to finance expansion. Outstanding debt at the mainland's non-financing corporations has risen to 1.25 times gross domestic product, among the world's highest. But analysts have expressed caution about exaggerating the stock market's role in supporting growth. "The key is for fundamentals to catch up. Then the rise in stock price is justified," Mizuho Securities economist Shen Jianguang said.

ANZ Bank chief greater China economist Liu Li-Gang urged Beijing to speed up the reform of state-owned firms and the development of the bond market.

"Simply relying on the stock market for financing, [means] the market would be distorted and bubbles would be formed," Liu said.