The Washington-based bank expects China to register a 9.6 per cent growth in its gross domestic product (GDP) in 2007, up from its previous forecast of 9.3 per cent made in August, the bank said in its latest quarterly China Economic Report released yesterday.

The bank's growth forecast for the Chinese economy this year remained unchanged at 10.4 per cent.

The Chinese economy expanded 10.4 per cent in the third quarter, down from a decade-high 11.3 per cent recorded in the second quarter.

"Prospects for the Chinese economy remain robust," the bank said.

"Looking ahead, underlying domestic economic conditions remain favourable to rapid growth," it said, pointing to 30 per cent annual corporate profit growth, ample liquidity in the banking system and robust enterprise investment growth.

Although the government's macroeconomic control measures to slow down investment growth have already had a significant impact, government-led investment in "bottleneck" infrastructure such as transport and energy is likely to remain buoyant, the lender said.

The bank noted domestic consumption "should continue to benefit from rising incomes, particularly in urban areas."

In addition, the external environment, where prospects for a soft landing of the world economy remain good, is also favourable for the Chinese economy in the next year.

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