China Has Policy Buffers To Sustain Growth: World Bank

The bank's biannual Global Economic Prospects report estimates China's GDP growth to slow to 7.1 percent this year from 7.4 percent in 2014, with the downtrend set to continue till 2017 with 6.9 percent growth.

Graphics Wallpapers Flag of China chine flag graphics (1)"China is undergoing a carefully managed slowdown," the report said.

The multilateral organization believes that China's (FXI, quote) public debt, which is less than 60 percent of the GDP, can provide fiscal space to employ stimulus against the slowdown. "It also provides some room to bail out banks if nonperforming loans were to rise sharply."

Fiscal space refers to the flexibility of a government in its spending choices, and, more generally, to the financial well-being of a government.

The World Bank said there is very little probability of a sharp decline in China's growth. If such an event were to happen, it would trigger a disorderly unwinding of financial vulnerabilities and have considerable implications for the global economy, it said.

China's growth is still impressive, and will account for more than one-third of the global growth in 2015, said Bert Hofman, country director for the World Bank in China.

"Despite the lackluster recovery in high-income countries, China's economy will still benefit from growing external demand and lower oil prices."

The National Bureau of Statistics is expected to release the full-year GDP for 2014 on Jan 20, with most economists anticipating the full-year number to be around 7.3 to 7.4 percent, the first time that China's growth rate would miss the official target, which was 7.5 percent.

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