The world economy in 2011 was not as rosy as most people expected at the beginning of the year. Will this year be better?

With the eurozone debt crisis hanging so heavily over the Davos forum, it is understandable why the World Bank cut its global growth forecast for 2012 from a June estimate of 3.6 percent to only 2.5 percent, the largest reduction in three years.

Global growth faces not only immediate uncertainties, such as the EU summit on Monday, which will hope to save Greece from becoming the first eurozone member in the 11-year history of the currency bloc to default.

The fact that many developed economies have a long way to go to reduce their debts as a proportion of gross domestic product is also casting a long shadow over any meaningful global recovery.

These are all good reasons to caution against premature optimism, but lower expectations are no excuse for postponing decisive action to fix the long-term problems the crisis has laid bare.

However, three years after the global financial crisis broke out in late 2008, emerging economies like China are already providing some light at the end of the tunnel.

Though the world's second largest economy has seemingly bid farewell to its decades of double-digit growth, it has made remarkable progress in shifting its economic emphasis from exports towards consumption.

As a percentage of GDP, China's trade surplus fell to an estimated 2.2 percent in 2011, compared with 3.1 percent in 2010 and a high of 7.5 percent in 2007.

The latest statistics from the Ministry of Commerce also indicate that the country's retail sales for the week-long Spring Festival holiday rose 16.2 percent year-on-year.

While China's rebalancing progress is still not fast enough, it is happening. And it is fairly reasonable to anticipate the Chinese economy will move in the right direction to further rebalance its growth model and serve as a key growth engine for the world economy.

In contrast, the near-term outlook for developed economies remains gloomy. Slow or even negative growth simply cannot alleviate the problems from ballooning debts in crisis-ridden European countries and the United States.

It is a pity that, at the start of 2012, the international community is still talking about a bailout with cheap money.

The US Federal Reserve Board recently vowed to keep its interest rate ultra low until late 2014, while the European Central Bank decided to flood lenders with nearly a half-trillion euros (nearly $650 billion) in cheap, three-year loans.

Cheap money can only buy some limited time for debt-laden countries to come up with a longer-term solution to their underlining economic woes. The sooner Western policymakers recognize this, the sooner they can embrace the painful but decisive actions needed to revamp their economies in line with the new global economic reality.