BEIJING: The outlook for China's economy remains "favorable" according to a new report by the World Bank, which plays down worries about overheating despite predicted growth of 10.4% this year and 9.3% in 2007.

The Bank has projected a mild slowdown in exports and fixed assets investment for the second half, which would imply a slight fall in GDP growth to under 10% at the end of the year.

The report explains that in the long term, however, the continued investment boom warrants concerns about efficiency and makes more moderate growth desirable.