Economic growth is expected to top seven per cent for East Asia and pacific (excluding Japan), while developing economies in the region are expected to grow by more than eight per cent, the World Bank said in its latest East Asia and pacific regional update.

For China, the World Bank expects that, with underlying inflationary pressures projected to remain limited, drastic macroeconomic measures to cool down the economy are unlikely to be imminent and if the economy lands at all, it is likely to be a ‘soft landing’.

Fears of a hard landing also remain limited in light of continued strong demand indicators in recent months. The World Bank expects gross domestic product growth to ease to 9.25 per cent for 2004 as a whole and around eight per cent in 2005.

From July to September, China's economy grew 9.1 per cent compared with a year earlier, after registering 9.8 per cent in the first quarter (January-March) and 9.6 per cent in the second (April-June) according to GDP figures released by the Chinese government.

"Policy measures to cool down the economy are starting to show some success, but it is too early to call the end of the investment boom that has become known as 'overheating'," Bert Hofman, lead economist for China said, noting that underlying incentives for over-investment have not changed.

"At the same time, the recent increase in interest rates, while modest, is encouraging as it shows the authorities' willingness to use this instrument when needed and signals a further move to more market-based macroeconomic management," Hofman said commenting on China's October 28 decision to raise the interest rates to limit investments in overheated sectors.

According to the report, exports from the region should turn in their strongest performance since 1988, supported by demand from China, the global recovery, a rebound in the global high-tech industry, and strong commodity prices. Investment has also recovered, contributing half of aggregate demand growth.

The strong performance has lifted 40 million East Asians out of poverty, mostly in China, Indonesia, Thailand and Vietnam this year, the report said.