CHINA'S growth will slow to 6.5 per cent, the World Bank has forecast in its latest quarterly report, 0.2 per cent lower than the January International Monetary Fund forecasts and well below the 8 per cent that Beijing officials say they need to ensure social stability.

Yet despite China being hit hard, the World Bank says the country is holding up better than most other economies because of the huge fiscal stimulus injected early by the Government, a strong banking sector and some growth in domestic demand.

The regular assessment of the Chinese economy finds that its banks have been largely unscathed by the international financial turmoil and that the economy still has plenty of space to implement forceful stimulus measures.

However, as the global crisis has intensified, China's exports have been hit badly, affecting market-based investment and sentiment, notably in the manufacturing sector. It is this that has prompted the World Bank to adjust its projection for China's GDP growth downward. It follows the bank's recent downgrading of projections for global GDP growth.

There is, however, some good news for Australia in the report. The World Bank says China's imports - mainly raw materials which Australia and others supply - were down in February, but not nearly as sharply as they were in January, when there was a precipitous decline.