Fixed-asset investment will remain resilient despite the sluggish property sector because there is still plenty of room for more investment in infrastructure such as mass transit networks, said the global banking group in "China Economic Spotlight". For example, only 15 of 660 cities in China have or are building subway systems.

Real growth in urban fixed-asset investment has slowed from 22 percent year-on-year in 2007 but was "still over 17 percent year-on-year" in the first seven months of this year, according to the report.

Export growth eased to 22.7 percent year-on-year in the first seven months of 2008 from 28.7 percent a year earlier.

"China's exports to the United States and European Union are expected to dip further in coming quarters, but exports to other global emerging markets should remain strong, providing a floor to the slowing but still resilient export sector," said the report.

The government, which is still in a good fiscal position, can prevent growth from slowing below 8 percent to 9 percent by boosting spending or cutting taxes, it noted. Government revenues grew 32.4 percent in 2007.

China's economic growth decelerated in the past three quarters, from 11.3 percent in the last quarter of 2007 to 10.6 percent in the first quarter of 2008 and 10.1 percent in the second quarter.