Louis Kuijs, China economist at the Royal Bank of Scotland in Hong Kong, insists that such an argument overstates the role urbanization has played so far in China growth story. He points out that between 1995 and 2012, it accounted for only 1.4 percentage points of the 10 percent annual growth during this period.

"It is very much a Krugman type of thinking and it is really a caricature. His argument is that China's growth and that of other Asian countries have been based on perspiration and not inspiration and just simply throwing people into factories.

Jian Chang (left), China economist at Barclays Capital; and Louis Kuijs, China economist at the Royal Bank of Scotland. Provided to China Daily, Edmond Tang / China Daily

"If you look closely at China, you will see that there is an awful lot of growth coming from other sources, the capital deepening of all that investment and also learning by doing. There has been a lot of technology improvement and productivity growth."

Kuijs also insists that if China's growth was based on urbanization as Krugman has suggested there would also be a lot of further scope for growth since 30 percent of the population was still in the countryside.

"China needs to have less than 10 percent of its population in the countryside so in my view there is still quite a lot of surplus labor left," he says.

China's level of growth is not just an issue for China but for the rest of the world. Some 40 percent of global economic growth since the onset of the financial crisis has come from China.

Chang at Barclays says this level of contribution to the overall global picture was never sustainable anyway.

"It has been a period when global growth has also been very slow. The sharp rebound that China had following the global financial crisis was stimulated by domestic investment and rapid credit expansion. That is certainly not sustainable," she says.

Williams at Capital Economics says falls in China's growth mainly affect commodity-producing nations in Africa, Latin America and also Australia.

"China obviously matters a great deal to commodity producers and to many global firms, but it has not been a key source of demand for the major developed economies and its financial system remains quarantined behind capital controls," he says.

"Despite China's size, developments in its economy have a far smaller impact overseas than shifts in the US or Europe."

Magnus at UBS, however, believes the level of China's growth now matters way beyond just the commodity producing countries.

"China is also the world's biggest exporter, a crucial export market for others, and a rising chunk of global GDP. It matters what happens to China, and slowing secular growth in China will have consequences," he says.

For Kuijs at RBS, you only have to see the reaction of the global stock markets to the recent encouraging economic data from China to realize just how significant the world's second-largest economy now is.

"There were people who had become very bearish about the Chinese economy. You have only got to see how the investment community responded to the latest good data and its effect on global markets to realize how important China is," he says.

andrewmoody@chinadaily.com.cn