The World Bank cut its forecast for China's 2008 GDP growth to 9.6 percent in a report released on Monday, 1.2 percentage points lower than an earlier estimate of 10.8 percent.

In the newly-released China Quarterly Update, the World Bank said China's growth prospects remain robust but there are macro-policy challenges, including those from inflation.

China's economic growth has begun to inch down from its record high in 2007, but the country is in a strong macroeconomic position to stimulate demand by easing fiscal policy and credit controls, even if the global slowdown will be more pronounced, the bank said.