World Bank lowers China growth forecast

The World Bank reduced its forecast for China’s 2012 growth to 8.2% from 8.4% but said the government still has plenty of firepower to avoid a “hard landing,” the Financial Times reported. However, the bank said that another round of stimulus should not be credit-driven or focus on infrastructure investment. “The burden of any countercyclical response should fall on fiscal policy,” it said in the organization’s twice-yearly report on the region. “Fiscal measures to support consumption, such as targeted tax cuts, social welfare spending and other social expenditures, should be viewed as the first priority.” Separately, China’s State Council said on a government website Wednesday that it would “proactively take policies and measures to expand demand and to create a favorable policy environment for stable and relatively fast growth,” including speeding up planned rail, environment and rural infrastructure projects.