Senior economist Wang Tongsan of the Chinese Academy of Social Sciences (CASS) reported on October 10 that he expects the economic growth rate for 2004 to rise slightly from last year's figure.

CASS economists are forecasting growth of 9.4 percent this year, slowing slightly to 8.9 percent in 2005.

"If there are no major breaking events internationally, or severe natural disasters or other big domestic issues, the country's economy is capable of maintaining a growth rate of more than 8 percent next year, due to the macro-control measures," said Wang.

China's economy grew 9.6 percent year-on-year in the second quarter of this year, slowing from 9.8 percent in the first quarter and reflecting initial results from the government's efforts to rein in investment.

"The overall performance of the economy was good," Wang said.

However, he noted, some prominent problems in the economy still remain. Energy and transportation bottlenecks, a possible rebound in fixed asset investment and the rapid declines in money supply and loans remain nagging issues.

Niu Li, a senior economist at the State Information Center, said the government should also keep a close eye on inflation, as upward pressure on prices is looming large.

"While food prices remain high, international oil prices are rising rapidly," he noted.

However, the National Development and Reform Commission announced on October 9 that it is predicting the rise in consumer prices to stabilize and possibly slow in the fourth quarter.

Food prices held steady during the recent week-long National Day holiday, it said on its official website, and the average grain price - now at its second highest level ever -- is expected to decline on lower international prices. Cheaper grain will pull down costs for non-staple foods such as milk, meat and poultry.

Food prices account for about one-third of the consumer price index, policymakers' key inflation gauge.

The CPI rose 4 percent year-on-year in the first eight months of 2004, hitting 5.3 percent in August for a seven-year high. September figures have not yet been released.

(China.org.cn China Daily October 11, 2004)