A report by the Chinese Academy of Sciences (CAS) predicted that prices of Chinese goods would rise moderately in 2007 and the growth of fixed assets investment may slow down.

The Chinese economy will continue to adjust in 2007 with the focus on better quality and more flexible economic structures, according to the report by the CAS forecasting center.

The central government will take a firmer approach to macro-control measures and macro-control policies will be more carefully designed, said Wang Shouyang, director of the research center.

The large number of projects under construction will keep investment buzzing in 2007, but growth will slow, according to the report.

Uncertainty about crude oil prices may push up oil product prices, Wang said.

Tougher environmental protection and social security requirements will increase manufacturers' costs and be passed on to consumers as higher prices for goods, he said, adding that the price rise should be moderate.

The world economy is expected to slow down in 2007. Lower tax rebates on steel, non-ferrous metal, textile and furniture exports will rein in export sales.

Wang said that domestic consumption would grow in 2007, citing higher incomes for urban residents and farmers in 2006 as well as government efforts to reduce health care, education and housing costs.

Source: Xinhua