London, November 15:

China must make greater efforts to encourage consumer spending in the hope of reining back its surging trade surplus before it creates dire consequences for the local environment, the World Bank said yesterday.

The development bank also warned the country’s export-led boom would cause imbalances in the economy. To keep up growth averaging 10 per cent, the bank said, Chinese leaders depended on an unsustainable increase in manufacturing output. Rising labour costs and increases in the price of raw materials meant Chinese companies were spending more to create the same output than rival countries such as India. The ba-nk said attempts by the government to squeeze investment growth were hel-ping the situation but nee-ded to be matched by gr-owth in spending.