The World Bank said that its outlook for Chinese economy remains benign and expects the economy to benefit from continued high growth in export as well as increasing investments. The World Bank, in its in its latest China Quarterly Update, said that the positive economic growth forecast for the U.S. and Europe and pickup in Japan's domestic demand would ensure China's exports growth. The World Bank said that steady demand for exports would overcome any negative domestic supply side pressures. The World Bank also expects China's commodity prices to ease from 5.9% year-over-year growth witnessed in Q4/2005 to around 2% by mid-2006.

The World Bank finds excessive liquidity as the major risk for the Chinese economy. The World Bank said that high levels of liquidity could fuel credit and investment. However, World Bank expects investment growth to moderate in the current year. The World Bank expects Chinese economic to expand by 9.2% in 2006 and inflation to remain moderate. The World Bank also expects current-account surplus to decline during 2006.