The bank's estimate of 7.5 per cent growth for the Chinese economy in 2009 is also lower than those from the International Monetary Fund (8.5 per cent) and the Organisation for Economic Cooperation and Development (8 per cent) this week.

But their projections are still considered optimistic by the standards of economists in the private banking sector, some of whom have issued dire warnings of a severe slowdown in China.

Brokerage firm CLSA, for instance, warned earlier this month that economic growth in China could plunge to as low as 5.5 per cent.

It is widely assumed in media reports and even by some analysts that China needs to maintain an annual economic growth of about 8 per cent in order to keep social unrest at bay, even though no concrete figures have surfaced to support this argument.

The World Bank's Beijing-based economists acknowledged that any forecasting was tricky in the face of an unfolding economic crisis, but maintained that there was simply no 'scientific basis' behind this assumption about the 8 per cent figure.

'I don't think there's any magic growth number that China needs to achieve to create enough jobs,' Mr David Dollar, the World Bank's country director for China, told reporters yesterday.

'I sincerely think China has the tools to keep growth at a level that would create enough jobs to meet the welfare objectives of the Chinese people.'

The World Bank previously projected the Chinese economy to grow by 9.2 per cent next year, but revised the estimate downwards in the light of the growing global economic crisis.

If the forecast proves to be accurate, it would be China's weakest growth since 1990, when the economy expanded just 3.8 per cent.

China's gross domestic product (GDP) growth last dipped below 8 per cent in 1999, when the figure was 7.6 per cent. But no major outbreaks of social unrest were reported then.

Mr Dollar also pointed out that the GDP growth rate alone did not always tell the full story about job creation.

If the growth came from the heavy industries, for instance, job creation would be limited. But if the growth stemmed from an expansion of the services sector, then China will likely see greater job creation despite experiencing a slower overall rate of growth.

'So we see this 7.5 per cent GDP forecast as being consistent with creating enough jobs to keep the Chinese labour market pretty tight,' he added.

Top Chinese officials have been keeping a close eye on the labour front in recent months, amid concerns that the growing number of factory closures in the country's southern and coastal manufacturing belts could trigger unruly disputes over issues like unpaid wages.

Human Resources and Social Security Minister Yin Weimin, who described the country's jobs situation as grim, told reporters last week that the government had rolled out new measures to deal with these disputes and would provide financial aid to help firms retain workers.

China has also already lined up a four trillion yuan (S$897 billion) stimulus package to deal with the slowdown, focusing on infrastructural projects that would keep the crucial steel and construction industries busy.

While there are doubts about just how much of this massive stimulus plan is genuinely new or just a repackaging of existing projects, the World Bank noted that the package would nonetheless 'imply higher direct government spending and should thus have significant effect on output in the short term'.

The bank added in its latest quarterly economic report: 'The significance of the stimulus package is that, with the central government's approval and financial backing, the projects can now be concretised and prepared, including in terms of arranging supplementary financing.

'Many had been in China's medium- and long-term development plans, but without concrete timing and financial envelopes.'

China, which has the world's largest foreign exchange reserves of about US$2 trillion (S$3.06 trillion), is in discussion with the World Bank on possibly offering more loans to developing countries.

However, Mr Dollar said no further details were available at this point.

chinhon@sph.com.sg