Feb.15 - The World Bank said on Wednesday it is optimistic about the Chinese economy, with a high growth rate of 9.6 percent possible this year.

 

Still, it warned, in its latest China Quarterly Update, that the country must cultivate new sources of growth to rebalance its economic expansion.

 

The World Bank report says domestically, the fundamental drivers of investment remain, and investment is therefore unlikely to slow drastically in 2007, while boosting consumption will remain challenging, particularly in rural areas.

 

It also says China's imbalance in foreign payments is unlikely to shrink much in the near future, as a significant surge in inflation is considered "unlikely".

 

China has said it would reduce the access thresholds for financial institutions to attract a more diverse set of providers and continue reforms of the Agricultural Bank of China.

 

The Quarterly notes that rural finance would also benefit from liberalization of interest rates and further reforms of existing providers.