The Chinese Ministry of Commerce (MOC) predicted Thursday that retail sales for the catering industry will reach 390 billion yuan (47 billion US dollars) in the second half of 2004 and that annual sales will hit 720 billion yuan (84 billion dollars).

The ministry said in a report issued Thursday that China's catering industry witnessed fast growth in the first six months which will continue in the second half year with an expected annual growth of 18 percent.

In the first half year, catering retail sales reached 337.4 billion yuan, up 24.5 percent year on year, and accounted for 13.4 percent of the total retail sales nationwide, and stimulated it's growth by three percentage points, the report said, quoting figures from the National Statistics Bureau.

The retail sales of catering in southern China's Guangdong Province was 47.45 billion yuan in the first half year, topping other provinces nationwide, it said.

The impact of avian flu to the catering industry was limited in some region and short-term, the report said.

The report said that the consumption on summer vocation, National Day and Christmas would spur catering consumption in the coming months.

The large-scale conference and exhibition held in autumn would also promote commercial catering consumption.