Their comments came after the US Federal Reserve announced on Wednesday an interest rate hike of 75 basis points, following a similar rise in June, in a bid to tame inflation. The total increase of US rates in two months hit 150 basis points.

The Fed's aggressive rate hikes, in tandem with tightening by other central banks to fight inflation, could cool off global demand and growth too sharply, underlining the necessity for China, the world's second-largest economy, to boost domestic demand as a cushion, experts said.

At a meeting on Thursday of the Political Bureau of the Communist Party of China Central Committee, the Party's core leadership, it was decided that macroeconomic policies should proactively expand demand and that monetary policy should amplify support for credit expansion by enterprises.

"Given the growing recession risks facing the world economy, especially in Europe and the US, China's economy may feel growth pressures due to weakening external demand," said Cheng Shi, chief economist at leading lender ICBC International.

"Effectively expanding (domestic) investment will be crucial for China to fend off the external risks," Cheng said, adding that fiscal policy may play a major role in boosting investment while monetary policy is expected to continue structural support for businesses and improving the living conditions of people in the country.

Concerns over an economic recession are evident in the inverted yield curve of US Treasuries, as the yield of 10-year US government bonds has stayed below the yield for two-year bonds recently. An inversion in those bonds is normally seen by most market investors as one of the key harbingers of a possible recession occurring within weeks or months.

US real GDP decreased at an annual rate of 0.9 percent in the second quarter of the year, marking the second consecutive quarter of economic contraction, the US Bureau of Economic Analysis said on July 28.

Liu Mingkang, the former head of China's top banking regulator, warned at a recent forum that if the Fed's accumulative increase in interest rates amounted to 4 percentage points in two years, not only could the US economy fall into recession, but the world could face a financial and economic crisis.

The rate hike on Wednesday brought the US federal funds interest rate to between 2.25 percent and 2.5 percent, compared with near zero at the beginning of the year.

Several more increases may be in the pipeline, including a possible 50 or 75 basis point rise in September and a 25 basis point boost in November and in December, the experts said.

In contrast, China's loan prime rates, the market-based benchmark for lending rates in the country, could drop slightly in the rest of the year as the nation boosts credit demand in the real economy, said Mary Xia, China rates strategist at UBS Securities.

The People's Bank of China, the nation's central bank, may also reduce the reserve requirement ratio, the proportion of funds a bank is required to keep in reserve, Xia added.

Such moves may lead to further monetary policy divergence betw­een China and the US. While the divergence could drive some capital to leave China for higher interest rates in the US, analysts said the overall impact should be manageable for Beijing, given the steady appeal of renminbi-denominated assets.

Channel Yeung, an analyst at online trading platform FXTM, said China's economic growth may outpace the world this year.

Yi Gang, governor of the PBOC, pledged at the recent G20 meeting of finance ministers and central bank governors that China will give more substantial monetary support to the real economy to provide a bulwark from pressures caused by the COVID-19 pandemic and external shocks from the global economy.