The World Bank has slashed China's economic growth forecast to 6.5% in 2009 but said the Asian giant was resisting the global economic firestorm with solid fundamentals.
'As the global crisis has intensified, China's exports have been hit badly, affecting market-based investment and sentiment, notably in the manufacturing sector,' the World Bank said in a quarterly report on China's economy.
In sharply lowering its previous 7.5% growth estimate for the Asian giant, the World Bank noted it followed recent downward revisions for global gross domestic product (GDP) growth in 2009.
According to the latest World Bank global forecasts, published in December, the world economy would expand at a weak annual rate of 0.9% in 2009, with a 0.1% contraction in developed economies offset by growth in developing countries of 4.5%.
A Chinese government think tank this month forecast first-quarter growth would slow to 6.5% from a 6.8% pace in the fourth quarter last year.
The World Bank said that China's banks have been largely unscathed in the global financial turmoil that accelerated after the collapse of US investment bank Lehman Brothers in September.
'The economy still has plenty of space to implement forceful stimulus measures,' said the Washington-based development lender.
Chinese Premier Wen Jiabao said last week that China has made plans to inject more money into the economy, admitting the global crisis was making this year's growth target of about 8% hard to achieve. The Chinese government unveiled an unprecedented four trillion yuan ($580 billion) stimulus package in November.
British Prime Minister Gordon Brown said earlier this week that he believed China would agree on the need for new fiscal and monetary measures to tackle the global downturn at the April 2 Group of 20 summit in London.
The World Bank stressed that while China's economic growth outpaces that of most other countries, GDP growth at an annual rate of 6.5% 'is significantly lower than potential growth'.
