Chinas economy will grow at 9.2% this year and will become less reliant on exports, according to the World Bank. The banks quarterly update said Chinas politically sensitive trade surplus, which tripled to $102bn (£58bn) in 2005, had peaked. China has been accused of undervaluing its currency, the yuan, in order to gain an unfair trade advantage. But the bank said rising domestic investment and consumption led Chinese imports to outpace exports in December. Elsewhere in its report, the bank said consumption in China would not rise fast enough in 2006 to achieve the governments goal of balanced economic growth. It said China needed to invest more in social services for rural areas to make people there more confident about spending. Overcapacity It also noted that the continued strong growth in investment was raising fears that over-capacity could hit some industries, lowering prices and profit margins. Chinese construction worker at building project in Beijing The World Bank says too much investment may not be a problem But the banks chief economist for China, Bert Hofman, was not too concerned. “Just because a plant can produce more than it currently does would not necessarily mean that theres a huge problem,” he said. “Especially when, as with China, you are growing at about 10% a year. “What is 20% overcapacity?” he said. “It just means that you plan two years ahead.” Chinas economy has grown at about 10% in the past three years, with some experts saying that it might now be the worlds fourth largest after the US, Japan and Germany. The World Bank said that the Chinese government was looking to balance out its economic growth, putting more emphasis on protecting the environment and distributing wealth around the country.

found on BBC News: A delegation of US senators is visiting Beijing, amid a clamour in Washington for action over the value of the yuan and its impact on US-Chinese trade. The US Senate will vote this month on a bill to impose tariffs of up to 27.5% on some Chinese goods unless Beijing moves to free up its currency. Some US politicians believe the yuan is artificially undervalued, letting China sell its products more cheaply abroad. China has ruled out another revaluation after raising the yuans value in July. Limited progress Chinese Prime Minister Wen Jiabao said recently that Beijing would allow greater flexibility in its exchange rate. However, the Bush administration is pressing for more substantial action, believing the yuans value is fuelling the growing US trade deficit. Ahead of a series of meetings with senior Chinese officials, Senator Charles Schumer said the purpose of the trip was not to deliver ultimatums but to learn about Chinese intentions on the issue. “To say that there has been no progress would be wrong but to say that there has been complete progress would be wrong,” he said. “We would like to get an idea from our Chinese hosts what the future is going to be like.”