Economists polled by Reuters expect growth this year to be around 9.5 percent, which would be enough for China to relegate Japan to No 3 in the world economic rankings.

Goldman Sachs expects China to eclipse the United States as the biggest economy by 2027.

Ma Jiantang, head of the National Bureau of Statistics (NBS), however, said China faces many challenges even if it becomes the second-largest economy.

"According to the UN standard - that is $1 a day - there are still 150 million poor people in China. That is China's reality," Ma said. "So despite the increase in our GDP and economic strength, we still have to recognize that China is still a developing country."

China's per capita GDP ranked 106th in 2008, according to the International Monetary Fund.

Ma also said the NBS will closely monitor price trends.

The consumer price index (CPI), the major gauge of inflation, rose 1.9 percent in December, compared with 0.6 percent in November, NBS statistics show. The CPI dropped by 0.7 percent for the whole of 2009.

Ma said price rises were "mild and under control", but many economists fear that the CPI could hit 5 percent or even higher in some months this year.

Due to the severe winter and the upcoming Chinese New Year, the CPI is expected to continue its sharp rise over the next two to three months, Nomura International said in a report.