The World Bank says China's economic growth is set to slow, and warns that developing countries face more shocks from Europe's sovereign debt crisis and slowdowns in various emerging markets.
The lender has cut its global growth forecast by the most in three years, saying a euro-zone recession threatens to worsen a slowdown in developing nations such as Mexico and India.
'[Gross domestic product] growth in China ... eased from 10.4 per cent in 2010 to an estimated 9.1 per cent in 2011, and is expected to dip further to a [still robust] 8.4 per cent in 2012, as authorities continue to dampen quite rapid growth in a number of sectors of the economy,' said the bank in its Global Economic Prospects report, which was released yesterday.
'Output is projected to ease in 2013 to 8.3 per cent, in line with the country's longer-term potential growth rate.'
However, the world's second-largest economy could still achieve a 'soft landing' this year, said World Bank chief economist Justin Lin.
China's massive foreign exchange reserves would help it shrug off external pressures and maintain a growth rate of more than 8 per cent this year, Lin said. 'China has lots of room for stimulative fiscal policy as its total sovereign debt is very low by global standards,' he said.
The report came a day after China released full-year economic data for 2011 which showed GDP grew at its slowest pace in two-and-a-half years in the fourth quarter. The National Bureau of Statistics said full-year economic growth slowed to 9.2 per cent last year, from 10.4 per cent in 2010.