China's economic growth is expected to fall to 9.6 percent this year from 10.7 percent last year amid a mild slowdown in exports, the World Bank has said.

Export growth is likely to decline to 20 percent this year, in real terms, from 24 percent in 2006, the World Bank said in its 21-page quarterly update on China.

A resilient world economy means that export demand prospects remain good, although less buoyant than in 2006," the report said Wednesday.

The World Bank said productivity growth meant exporters would probably be able to continue absorbing the effect of a rising currency and the gradual lowering of export tax rebates.

Investment, a main engine of growth in the world's fourth largest economy in recent years, is unlikely to slow drastically in early 2007, while consumption should grow solidly, it said.

"With rising profit growth and ample liquidity in the banking system, the fundamental drivers of enterprise investment are still present," the report said.

"Consumption (will be) underpinned by income growth and to a lesser extent the shift in government spending towards health and education, but held back by food price increases," it said.

The World Bank urged China to increasingly rely on new sources of growth in the medium term, with a re-allocation of labor out of agriculture and into services, and labor-intensive urban growth, seen as key.

This could boost urban employment, wages and household incomes and reduce rural-urban disparities, while mitigating external imbalances, the bank added.

"Re-balancing the pattern of growth, featuring a move to more labour intensive urban growth, will need to be a key part of an effort to boost the role of consumption in the economy and to reduce the trade surplus," it said.