China's economy is unlikely to slow sharply in 2007 because rising consumer spending and industrial production will underpin growth, Yao Jingyuan, chief economist of the National Bureau of Statistics, said Sunday.

"The government's policy to boost consumption will show better results next year," Yao said in an interview with Bloomberg News at a business forum in Beijing. Consumer spending should make a "greater contribution to economic growth, even though investment may slow amid the government's curbing measures."

China has raised minimum wages and increased welfare spending to get households to spend more and make the economy less dependent on investment and exports. As it encourages spending by consumers, China has increased interest rates and ordered banks to set aside more money as reserves to dampen business investment and clamp down on wasteful factory expansion.

"Growth will continue to be strong in 2007, but weaker than this year," Federico Bazzoni, head of Asian equities at BNP Paribas SA, said in an interview in Milan on Friday. "That's good news, as there are fewer risks of overheating. Growth in 2007 will be less than 10 percent."

China's economic expansion slowed in the third quarter for the first time in a year as lending curbs affected business investment. The economy grew 10.4 percent in the quarter from the same period a year earlier, compared with 11.3 percent in the prior three months.

The world's fourth-largest economy will maintain "steady and relatively fast growth" in 2007, Yao said at the conference, without providing a forecast.

The World Bank on Nov. 14 raised its estimate for China's 2007 economic growth for a second time in four months. The World Bank said China's economy may expand 9.6 percent next year after advancing 10.4 percent in 2006.

China's 2006 growth rate may be as high as 10.7 percent, Yao said yesterday. Gross domestic product will rise between 10 percent and 10.7 percent this year, he said in Shanghai.

Consumer spending is increasing as curbs on lending and land use slow business investment, helping China's economy skirt a sharp slowdown.

(Shanghai Daily November 27, 2006)