China's retail sales of consumer goods are expected to rise 15.8 percent this year, the fastest nominal growth in a decade, according to a report from the State Information Center. Retail sales would rise to 8.85 trillion yuan (1.15 trillion US dollars) in 2007 from last year's 7.64 trillion yuan, partly driven by increasing incomes of urban and rural residents, said the report.

The consumer price index (CPI) this year may exceed 3 percent, the warning line set by the central bank, according to the National Development and Reform Commission (NDRC). In the first five months of the year, the CPI rose 2.9 percent. But in May, it rose 3.4 percent, the highest in more than two years. The NDRC said the growth was driven by the fluctuations in international grain prices. The growth of the biofuel industry in major developed countries, which has pushed up demand for corn and soy, has led to sharp rises in grain prices in the international market. These price rises have, in turn, spilled over into the domestic market, affecting the costs of eggs, meat, poultry, milk, and edible oils.