The International Monetary Fund says China's economy is undergoing a “soft landing” as weaker demand for its exports and a rebalancing of domestic priorities affect the country's growth.

In a report Wednesday, the IMF said it expects China's growth to slow from more than 9 percent in 2011 to 8 percent this year. It cited the eurozone debt crisis as the main outside risk to the economy, but China recently has been cutting borrowing costs to spur growth.

The report says China has made progress in taming inflation during the past year, especially for food prices.

The IMF advised China to do what it can to meet its growth targets, and to work toward transforming its economy to be more reliant on domestic consumption rather than on exports.

The report also said China's currency is “moderately undervalued.”