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China's Economy Seen Growing by 9.5% in 2007

China's economy may grow around 9.5% in 2007 as expected rises in domestic consumption offset slowing fixed-asset investment and foreign trade, a state think-tank forecast.

China's yuan currency may appreciate a further 3 to 4%, according to a report by the State Information Center, a think-tank under the National Development and Reform Commission.

Gross domestic product was expected to grow at between 8.5% and 10.5% next year, it said.

Beijing has taken measures to rein in fixed-asset investment growth and reduce energy consumption as part of efforts to prevent the world's fourth-largest economy from overheating.

Overall fixed-asset investment expanded 31.3% in the first half of this year, sparking concern the economy might overheat. The government has raised interest rates, increase banks' required reserves and order an audit of new investment projects.

"If the economy maintains a steady but fast growth, GDP growth should be at about 9.5%," said the report published in the Shanghai Securities News on Tuesday. Consumer prices were likely to rise 2%, it said.

Imports and exports would slow, but the trade surplus would expand to around $180 billion, it said. Export growth would fall 10 percentage points to about 15% partly on further yuan appreciation and lower export tax rebates, it added.

A government report in November said China's annual trade surplus was set to reach $150 billion this year, bursting past last year's record $109.8 billion, as exports continue to surge.

Fixed-asset investment growth would likely fall by four basis points to about 20% in 2007 due to the government measures to rein in runaway investment, Tuesday's think-tank report said.

Property investment would still grow by about 21% despite the government crackdown on the sector and tightening land controls, it said. China retail sales would grow about 12.5 percent, the report said.

Annual growth in China's broad M2 money supply -- which slowed in November to 16.8% from 17.1% in October -- should reach 16% next year, it said.

The domestic A-share market, which has almost doubled its value in 2006, would gain a further 20-30 percent next year, said the report, jointly prepared by the Shanghai Securities News.