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China's economic growth 'to slow'

By Michael Bristow
BBC News, Beijing

Young women in a Guangdong factory, 2006.
The global economic downturn could lead to job losses in China

The World Bank says China's economy will grow by less than expected next year, adding to the country's, and Asia's economic gloom.

China's economy is expected to grow by 7.5% in 2009, according to the Bank.

A few months ago, before the global financial crisis, it predicted the Chinese economy would grow by about 9%.

But the Bank says China will still do well enough to avoid the worst effects of the global recession, and could still help other developing countries.

The World Bank has revealed it is in talks with Beijing about providing additional money to help developing countries through the current crisis.

Speaking at a press conference, David Dollar, head of the World Bank's China office, said economic recession in the United States, Europe and Japan would affect China.

No immunity

Until recently, China had largely avoided the effects of the global crisis because its financial system is insulated from the rest of the world.

But that crisis is now leading to a worldwide economic recession - and that will affect China.

If people across the world have less money to spend, they will buy fewer Chinese imports; that will lead to factory closures and job loses in China.

"So far [the crisis] hasn't impacted all that much [in China], but we will see that impact intensifying," said World Bank economist Louis Kuijs.

But it is not all bad news - the Bank says the Chinese economy will still grow at a reasonable rate.

That is partly thanks to a $586bn (387bn) economic stimulus package recently announced by the government in Beijing.

As part of the package, China will be spending more on infrastructure projects over the next few years, including railway lines, urban subway systems, and water and sanitation projects.

Chinese leaders have appeared increasingly gloomy about the prospects for the country's economic outlook.

Last week, one senior official warned that unemployment would rise next year.

But World Bank officials believe China will be able to weather the coming global economic downturn.

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