It is reported by Reuters that China's economy is expected to grow 9.3 percent this year and 8.8 percent in 2007, as overcapacity in some sectors starts to affect economic growth, according to an official forecast published on Monday.
The State Information Centre, a leading government think-tank linked to the country's top planning body, the National Development and Reform Commission, made the forecasts in a report published in the official China Securities Journal.

"Currently, some industries face serious overcapacity, and the negative influence of that overcapacity will start to fully show its effects in 2007, so the possibility of a slowdown in growth and entering into a period of adjustment in 2007 is relatively large," the report said.

The agency also forecast that retail sales would grow 12.8 percent in 2006 and 12.5 percent in 2007.

It said it expected the consumer price index (CPI) to rise 2 percent in 2006.

The Xinhua news agency on Sunday reported that a joint group from Beijing University and the National Bureau of Statistics had forecast that consumer prices this year would rise about 1 percent.