WORLD BANK / CHINA

While China’s economy is suffering during the global downtown, it is still holding up, according to the World Bank.

Like the rest of the world, China has been hit hard by the global economic crisis. As the crisis has intensified, China’s exports have been battered, affecting investment and slowing manufacturing.

In light of this, the World Bank is adjusting its projection for China’s growth downward to 6.5 percent for 2009. But World Bank experts are quick to caution that China is still likely to continue to outgrow most other countries.

SOUNDBITE (English) David Dollar, China Country Director, World Bank Group:
“So we are seeing some areas of strength, we see some areas of weakness and we think 6.5 percent is a good compromise of sorts, a compromise in the sense that we know there are some hurting sectors in the Chinese economy and there are some areas that are doing pretty well. So we thought 6.5 percent was a pretty good compromise on that.”

Chinese banks have been largely spared the international financial turmoil. And some industries are doing well: cement manufacturing, railroads. And private consumption has remained resilient.

Trade and real estate, on the other hand, are suffering.

But experts say China is a relative bright spot in an otherwise gloomy global economy.

SOUNDBITE (English) David Dollar, China Country Director, World Bank Group:
“So a lot of things will go down in 2009 globally but we see China’s contribution as being very positive in keeping many markets from going down as far as they would otherwise, and helping get a floor and then hopefully helping, gradually, getting recovery in the world economy in 2009 and hopefully into 2010.”

The World Bank’s latest China Quarterly Report notes that the country’s economic fundamentals are essentially strong. Economists caution China not to neglect long term issues, like spending on health and education, in favor of short term growth.