China's economy is projected to grow by 4.5 percent in 2025 and 4 percent in 2026, with fiscal policy cushioning the slowdown pressures due to global trade restrictions and uncertainty, said the latest China Economic Update of the World Bank Group.

According to the update released on Friday, as global trade restrictions and uncertainty weigh on exports, manufacturing investment and hiring, fiscal policy is expected to cushion the slowdown through higher infrastructure spending, subsidies, and social protection benefits.

Medium-term growth prospects, however, remain constrained by slower productivity growth, relatively high debt, and an aging population.

"Household consumption will be key to sustaining growth amid external and domestic economic challenges," said World Bank Division Director for China, Mongolia and South Korea Mara Warwick.

"Beyond short-term stimulus, stronger social safety nets, especially for migrant and temporary workers, would encourage more spending by improving financial security and reducing the need for precautionary saving," Warwick said.