The World Bank cited the country's strong domestic demand and sustained competitiveness in exports.
"Amid weaker and uncertain global prospects, China's growth will be supported by strong international competitiveness and a robust domestic economy," David Dollar, the bank's country director for China, told reporters in Beijing.
Just two months earlier, the World Bank had lowered its growth estimate for China to 9.4 percent from 9.6 percent on weakening demand for its exports.
The back-and-forth revisions reflect the uncertainties prevailing at a time when the U.S. economic outlook remains murky due to the fallout from the mortgage lending crisis. They also result a revision in China's own gross domestic product growth estimate for 2007, which was raised by a 0.5 percentage points following the bank's most recent half-yearly report in early April.
"Global growth is on course to slow further and commodity price-driven inflation has become a complicating factor everywhere. These developments imply considerably more international uncertainty and risk," Dollar said.
"The upward revision to our growth forecast largely reflects revised GDP data showing stronger service sector growth," he said.
The Chinese government has set a growth target for this year of 8 percent following last year's sizzling 11.9 percent expansion.
The bank lauded China's progress in combating inflation, which fell to 7.7 percent in May from 8.5 percent in April. It forecast that the inflation benchmark, the consumer price index, will rise 6 percent in full-year 2008.
Didi Tang in Beijing contributed to this report.
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The World Bank:
Shares in European aerospace group EADS
Air Force to rerun a competition for a $35 billion contract
initially won by EADS and Northrop Grumman (NOC.N).
EADS shares at one stage fell as much as 4.4 percent to an
intraday low of 12.96 euros -- its worst level since touching a
near 5-year low of 12.83 euros in March.
The stock was down 2.6 percent at 13.20 euros by 4:13 a.m.
EDT, but EADS remained among the main losers on France's
benchmark CAC-40 index (.FCHI), which was down 0.4 percent.
The probe into the U.S. Air Force aircraft-refueling order
came after protests by EADS' archrival Boeing Co (BA.N), which
had lost out in the bid process.
French brokerage CM-CIC Securities said the U.S. challenge
to the contract would lead to a short-term negative reaction to
CM-CIC added that EADS also faced ongoing concerns over
problems with its A380 and A400M planes and the weakness of the
dollar, which hurts exports from European countries.
Oddo Securities cut its price target on EADS to 16.5 euros
from 20 euros, although it kept an "add" rating on the stock.
Oddo said that EADS might now want to speed up its plans to
do takeovers in the United States, in order to recover from
this setback in the important American defense market.
French politician Bernard Carayon, a member of President
Nicolas Sarkozy's ruling right-wing UMP party, criticized the
U.S. decision to challenge the EADS/Northrop contract.
"The challenge to the air refueling contract by the U.S.
Government Accountability Office is a blow to our transatlantic
relations," he said in a statement.
The French government takes a keen interest in the affairs
of EADS since the company's Airbus unit is one of the country's
The French government owns 15 percent of EADS. French media
group Lagardere (
percent stake to 7.5 percent while German company Daimler
EADS shares have fallen by roughly 40 percent since the
start of 2008, adding to a 16 percent fall last year.
British bank HBOS (HBOS.L) confirmed on
Thursday it was trading in line with expectations, but warned
higher writedowns would hit first-half performance, as a
sharper fall in house prices puts pressure on bad debts.
However, Britain's biggest mortgage lender said it was
passing on more of its higher funding costs through better
pricing on new lending, and forecast a slower decline in
margins than in 2007, before margins stabilize or improve next
Shares in the bank, however, fell more than 4 percent in
early trade, hit by the worsening economic outlook and
volatility ahead of a planned rights issue. At 3:45 a.m. EDT
the stock was down 3.8 percent at 306.5 pence, underperforming
a virtually flat FTSE (.FTSE) blue-chip index.
Concerns over a planned 4 billion pound ($7.8 billion) cash
call battered HBOS shares last week, with the bank forced to
issue a reassuring statement to the market just days after a
rival bank announced plans to slash the price of its own rights
But Chief Executive Andy Hornby said on Thursday that HBOS
was on track and brushed off worries of market "indigestion"
from a surfeit of rights issues as banks ask their shareholders
for cash to bolster their balance sheets.
"We're underwritten, and this rights issue is going ahead.
It's as simple as that. We are not for turning," Hornby said.
"Strong capital ratios are going to be essential for the
next three to four years, and banks with strong capital ratios
are going to have a competitive advantage," he told Reuters.
HBOS expects its core tier 1 ratio, already better than UK
rivals before the cash call, to rise to 6 to 7 percent.
HOUSE PRICE WEAKNESS
HBOS said it now expects UK house prices to fall by up to 9
percent in 2009 as the number of deals plunge -- down from a
previous forecast in late April of a mid-single-digit
percentage decline, and said this would entail impairment
It also became one of the first banks to warn of a "modest
rise" in unemployment, which could also push up arrears.
Arrears remained in line with HBOS expectations, but the
bank saw levels worsen from 1.67 percent at the end of 2007 to
1.89 percent at end-May, with arrears in specialist buy-to-let
loans rising to 1.59 percent, above levels seen at embattled
rival lender B&B.
Writedowns in the bank's treasury trading book increased
marginally from its late April trading update to 1.028 billion
pounds, but the bank stopped short of writing down the value of
lending to Britain's embattled housebuilding sector.
Hornby said the group had halved its equity exposure to the
sector by writing it down to 0.1 billion pounds, but that the
debt was underpinned by collateral including landbanks.
"I am confident we have taken a prudent view of the book at
the moment," he said.
HBOS's loans and investment in housebuilding represent less
than 1 percent of the group's balance sheet, but its stakes in
groups including Crest Nicholson, McCarthy & Stone, Countryside
Properties, Miller Group and Tulloch, have become a growing
concern for analysts.
HBOS expanded its exposure to residential property
developers in recent years in the wake of ambitious government
housebuilding targets, especially in and around London.
(Additional reporting by Mark Potter, editing by Will