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"Even in the best-case scenario of limited outbreaks in countries outside China, a sharp slowdown in world growth is expected in the first half of 2020 as supply chains and commodities are hit, tourism drops and confidence falters," the Paris-based group said in a report.

"Despite the slower start, economic momentum is supporting rising passenger demand in 2018," said Alexandre de Juniac, IATA's director general and CEO. "That said, concerns over a possible trade war involving the US could have a serious dampening effect on global market confidence, spilling over into demand for air travel," the IATA CEO noted.

"Everything, including stimulus measures from more proactive fiscal policy, should be within a safe range, or a legal framework," said Qiao Baoyun, head of the academy of public finance and public policy under the Central University of Finance and Economics in Beijing.

"Establishing a set of rules and guidelines is relatively easy. The hard part is implementation (especially with regard to fire safety issues)," he said.

"Expectations of a recovery in China's credit expansion figures for January, which indicate improved economic fundamentals, also raised foreign investors' interest in Chinese stocks," Zhang added.