Report: Chinese Economy Expected to Slow

China's economy is expected to grow 8.9 percent in 2006, slowing from 9.9 percent last year, the central bank's research department said in a report published Monday.

Annual growth in China's gross domestic product will gradually slow from 9.2 percent in the first quarter of this year to 9 percent in the second quarter, 8.9 percent in the third and 8.7 percent in the fourth quarter, said the report, carried by the state-run newspaper China Securities Journal.

The consumer price index, China's main gauge of inflation, is expected to be at about 2 percent this year, it said. The index climbed 1.8 percent in 2005.

Meanwhile, the government reported Monday that China's industrial output rose 20.1 percent in February from the same month a year earlier to 547.3 billion yuan ($68.2 billion).

The value of goods delivered for export rose 29 percent year-on-year in February, the National Development Reform Commission said in a report posted on its Web site.

The National Bureau of Statistics earlier reported that industrial output rose 16.2 percent year-on-year to 1.11 trillion yuan ($138.5 billion) in the first two months of this year.

China's economy expanded by 10.1 percent in 2004 but growth has been gradually slowing as the government attempts to rein in excess investment in real estate projects and some industries, such as steel and cement.

The government's five-year-plan, setting policy through 2010, calls for bringing economic growth down to 7.5 percent a year, with 2006 growth at 8 percent.

China's communist leaders have pledged to focus on improving environmental protection and quality of life rather than seeking maximum growth. But economic growth has so far remained stunningly high, supported by robust exports and investment.

The central bank's forecasts were based on the assumption of 4.3 percent world economic growth in 2006.