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World Bank urges China to cool growth

The World Bank on 17 March urged China’s government to take more measures to cool its economy and head off inflation, as the bank expects the country’s economic growth to accelerate to 9.5 percent this year.

In its quarterly report on China’s economy, the World Bank raised its forecast for China’s growth this year from the 8.7 percent increase the bank projected in November 2009 and suggested Beijing use interest rate rises and a stronger yuan to avoid inflation and the formation of asset bubbles in the domestic property market.

The bank recommended that China’s macroeconomic policy stance this year be tighter than in 2009 and that the country adopt different policy measures than most other major economies because it is growing so much faster. It said the case for using interest rates to tighten policy and allowing a more flexible exchange rate is growing.

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(Source: The Wall Street Journal Online)