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 to 8 percent this year, and cites the eurozone debt crisis as the main outside risk to the economy.

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

The IMF advises 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 says China's currency is “moderately undervalued.”