China today said its economy grew by 10.7 per cent at the end of last year as it dragged the world out of recession.

The surge in output in the fourth quarter meant the Chinese economy grew by 8.7 per cent last year and put it on course to overtake Japan as the second-largest economy in the world.

Ma Jiantang, head of the National Bureau of Statistics in Beijing, said: "China has become the first to achieve recovery and stabilisation in its economy."

However, he said China still faced "uncertainties" from the weak global output.

China's strength is welcome for the global economy, as the World Bank has warned that it will suffer the fallout from the financial crisis for years.

The Washington institution said growth could wilt later this year as government stimulus spending fades.

Mishandling of the economy could result in a "double-dip" with a return to recession in 2011, it said.

Ma played down speculation that China's economy was now bigger than Japan's.

"So despite the increase in our gross domestic product and economic strength, we have to recognise that China is still a developing country," he said.