China will grow slower in 2011 due to the unwinding of fiscal stimulus and the restrictions placed on overheating sectors, the World Bank said in a report.
The Chinese economy, one of the prime growth drivers in the last year as the world was fighting to emerge from a biting recession, will grow at 8.7 percent in 2011, as against 10 percent in 2010, the bank said.
China has put in place several restrictions to check the runaway rise of commodity prices as a measure to forestall asset bubbles. This will invariably put brakes on scorching growth it recorded in the previous years.
The Washington-based lender also slashed global economy's growth to 3.3 percent this year from 3.9 percent last year. The bank's 2011 outlook also noted that growth in the industrialized economies is not strong enough to address jobs crisis.
The World Bank said growth in the emerging economies will be six percent as against 2.4 percent in the developed countries. However, the developing world had grown seven percent in the last year.
The bank said the U.S. economy will grow 2.8 percent in 2011. The eruozone, hampered by a worsening peripheral debt crisis, will register only 1.4 percent in 2011, down from 1.7 percent last year.
A Reuters poll last month showed that Chinese economy will bottom out in the first quarter of 2011, at which point the year-on-year pace of expansion could hit a low of 8.2 percent.
The fast-growing Asian giant's economy grew an average 10.6 percent in the first three quarters of 2010 though signals of a moderation in the pace of growth have risen of late. The Reuters poll has shown China's growth next year will be marginally weaker.
Economists surveyed for the poll said the economy will slow to 8.9 percent in 2011. However, a poll in the previous quarter had shown that growth could be 9 percent next year.
Beijing's recent policies to curb inflation and prevent asset bubbles will have an impact on the growth this year. The government has been scaling back its fiscal stimulus program as well as tightening the extra-loose monetary policy as fears that an overheating could lead to asset bubbles and higher inflationary pressures.
The slowdown of China's economic expansion is not only associated with the growth base of last year, but it is the inevitable result of macroeconomic regulation and control initiated this year, according to said Xia Bin, director of the Financial Institute of the Development and Research Center of the State Council.
Inflation, which rose to 5.1 percent in November, still remains a concern for China.