Report predicts 7.7 pct growth for China's 2012 GDP

A government think tank on Wednesday forecast that China's economy would grow 7.7 percent this year before rising to 8.2 percent in 2013.

The growth rate of China's gross domestic product (GDP) decreased to 7.3 percent during the third quarter of this year, and it will only rise to 7.5 percent in the fourth quarter through more policy incentives, according to a blue paper issued by the Chinese Academy of Social Sciences.

The paper estimates that the overall GDP growth rate of 2012 will stand at 7.7 percent and the consumer price index (CPI), a major gauge of inflation, will end at 2.7 percent.

It also expects the GDP to grow 8.2 percent and the CPI to reach 3.0 percent in 2013.

Stabilizing economic growth is the priority of China's macro-regulation for the time being, according to the report, which suggests striking a balance between stabilizing economic growth, economic restructuring and deepening reform.

The paper also forecasts grave challenges for employment. The sluggish world economy in 2012 has reduced overseas demand, hence slower growth in export volumes, which made creating employment more difficult, it says.

And internal pressures are also piling up, along with the appreciation of renminbi, rising labor cost, a high rate of inflation, slower economic growth, and deepening of economic restructuring. Besides, more jobs have to be created for new workers, the unemployed and surplus labor in rural areas, according to the report.

Furthermore, the government's property market control has shown initial effects, but more commodity housing needs to be constructed to increase supply, according to the think tank authors.

The Chinese government has repeatedly reiterated its firm stance on property market control and vowed to keep in place tightening measures like bans on third-home purchases and property tax trials, which have been introduced one after another since 2010.

The report points out that the purchase controls have dampened the rapid rise of property prices, but control measures have also led to slower growth in property investment.

It suggests heavier investment in commodity and affordable housing, particularly small and medium-sized apartments, to meet people's demand while curtailing speculation.