World Bank sees risks as China rebalances

The mainland's economic growth is expected to moderate over the next few years as the economy continues to rebalance, the World Bank said in a report yesterday.

The Washington-based lender warned in its latest economic update that the world's second-largest economy was facing rising risks from an abrupt deleveraging of local government debt, a sharp cooling down of the property market and an uncertain export recovery.

"A rebalancing of growth from investment to consumption and from industry to services continues, but there are challenges and rebalancing is slow," the World Bank said.

It expects the mainland economy will grow by 7.6 per cent this year, supported by local policies and global demand recovery, but that the rate of growth may slow to 7.5 per cent next year and 7.4 per cent in 2016.

The International Monetary Fund said on Thursday that the mainland's gross domestic product would grow by 7.5 per cent this year but was expected to fall to around 7 per cent next year.

The central government's economic growth target for this year is 7.5 per cent.

"The prospect of growth falling below the government target will likely trigger accommodative fiscal and monetary policies," the World Bank said.