A World Bank (WB) official said on Monday that risks in asset bubbles are more dangerous than risks in inflation, which are new trends central banks around the world should give more attention to.

Hans Timmer, Director of the World Bank Prospects Group, told a press release on Global Economic Prospects 2010, an annual report of the WB's prospects for world economy, that international coordination, a major lesson learned from the global financial crisis, is necessary for central banks to withdraw easy monetary policies.

The recent rise of China's consumer price index (CPI) complies with the rising trends of commodity prices. It does not mean productivity has been limited and great pressure of inflation has emerged, he said.

China's CPI increased by 1.9 percent from the same period of last year in December 2009, after the index has risen by 0.6 percent in November 2009.

The major risks facing the Chinese economy are soaring asset prices, especially in the capital market and the real estate market, said Hans Timmer.

"It is encouraging that the Chinese government has thrown close attention to asset prices and has adjusted its monetary policies to control asset bubbles," he said.

According to data from the National Bureau of Statistics, property prices in China's 70 large- and medium-sized cities rose 7.8 percent year-on-year in 2009, surging 1.5 percent month on month. But in some big cities such as Beijing and Shanghai, price rise is even over 50 percent.

China had made several moves to stop the bubble in an early stage, including reimposing a sales tax on homes sold within five years of their purchase from this year and increasing the down payment requirement for property purchases to at least 50 percent of the total price.

As for Hans Timmer, whether it is the proper time to withdraw a stimulus financial policy depends on whether the country has more space to give financial stimulus to its economy.

He said that the major challenges to the Chinese government is not when to withdraw stimulus policies, but how to achieve its mid-term goal for a better economic development pattern.

As stimulus policies are temporary, it is simply a matter of time for withdrawal, said Ardo Hansson, the bank's lead economist in Beijing.

"The key is after withdrawing its stimulus policy, whether China could create long-term demands. That's why the central government has launched reforms in social security and rural area," he said.

Ardo Hansson predicted that exports will contribute more to China's economic growth in 2010, while investment, contribute less than 2009. "The contribution of consumption to China's economic growth will be stable," he said.

Global Economic Prospects 2010, released last week in Washington, predicted 9 percent economic growth for China in 2010 and 2011 respectively.

According to the report, global GDP, which declined by 2.2 percent in 2009, is expected to grow 2.7 percent this year and 3.2 percent in 2011. Prospects for developing countries are for a relatively robust recovery, growing 5.2 percent this year and 5.8 percent in 2011, up from 1.2 percent in 2009.

The report warns that while the worst of the financial crisis may be over, the global recovery is fragile.