Record low

China's PMI, a gauge of conditions in the manufacturing industry, fell to a record low of 38.8 points last month from October's 44.6 points. The figure was compiled by the China Federation of Logistics and Purchasing and the National Bureau of Statistics. It indicates a contraction or deterioration if it is below 50.

As gross exports accounted for almost 40 percent of China's economy, the impact of a slowing export sector was hard to tackle, the World Bank said.

Another weakness in China's economy lies in the real estate sector.

"Housing sales growth started to decline substantially and housing price increases moderated. The weakness is affecting most parts of the country, and it seems to be more pronounced in large cities, especially those that have seen rapid increases in recent years," the bank said.

The slower expansion of real estate construction has contributed to a sharp moderation in several upstream industries, such as steel, cement and electricity.

One bright spot for China was the impact of lower raw material prices on inflation, which left more room to wield the weapon of the expansionary policy.

China's Consumer Price Index, a major gauge of inflation, grew 4 percent in October, down significantly from a 12-year high of 8.7 percent in February.

Compared with the pessimistic forecast by the World Bank, some other economists have more faith in China's economy and the power of its macroeconomic control.

"A key theme for the outlook of the Chinese economy will likely be fiscal stimulus anchoring GDP growth. The government's strong political will and its ability to mobilize resources imply that growth is unlikely to suffer a hard landing," said Peng Ken, an economist with the Citigroup.

"The success of the stimulus policies will depend on the stabilization, not necessarily a quick recovery, of financial markets and global economies."

Peng said China's economic growth may settle at between 8 percent to 8.5 percent over the next two years.

Wang Qing, a Morgan Stanley economist, said China's GDP growth can reach 8.2 percent next year after sticking to 9.8 percent this year. "The strong balance sheet of the macro-economy, banking system, government and households seem to have made China the highland amid the global financial tsunami," said Wang.