March 4 (Bloomberg) -- China is naming a new generation of economic leaders just as its breakneck growth is slowing.

The officials to be appointed at the National People's Congress that starts in Beijing tomorrow, including former Beijing Mayor Wang Qishan and Politburo member Li Keqiang, may have to reach deeper into an economic toolkit that mostly has been used to cool expansion. China has already paused after raising interest rates six times last year.

Wang, 59, and Zhou Xiaochuan, 60, who economists say is likely to keep his job as central-bank governor, will need to tame inflation that is at an 11-year high without triggering a sudden slowdown. Their task is complicated by the prospect of weaker global demand this year for exports, a main driver of the world's fourth-biggest economy.

``China's concerns are going to shift from the economy being too hot to potentially becoming too cold,'' said Donald Straszheim, vice chairman of Newport Beach, California-based Roth Capital Partners. ``We'll see an end to the interest-rate hikes, an end to bank reserve requirement hikes, and I believe we'll also see an end to the appreciating currency.''

Straszheim expects gross domestic product in China, the single biggest contributor to global growth, to rise 8.9 percent this year, down from a 13-year high of 11.4 percent in 2007. Government researchers foresee a decline to 10.5 percent.

Driver's Seat

Wang probably will be named a vice premier and will drive economic policy, said Willy Wo-Lap Lam, an adjunct professor of history at the Chinese University of Hong Kong, citing party sources. State media also say he will get the post.

Li, 52, was named as a member of the Communist Party's top body in October and now may be appointed as an executive vice premier. He would oversee ideology while having less day-to-day influence on economic policy, according to Lam and Joseph Cheng, a political scientist at City University of Hong Kong.

Zhou, a past advocate of faster appreciation of China's currency, is likely to retain his job, according to economists including Mark Williams of Capital Economics Ltd. in London and Andy Xie, former chief China economist at Morgan Stanley, now in Shanghai.

``That he is staying is a good sign for those hoping for faster renminbi appreciation,'' said Williams, speaking of the currency, also known as the yuan. ``The sudden pickup in the currency's movements in the last few weeks suggest the argument has finally started going his way.''

Curbing Inflation

The yuan has gained almost 3 percent this year versus the dollar after climbing 7 percent last year. Gains by the currency help curb inflation by cutting import prices and making China's exports more expensive, helping to staunch the inflows of trade cash that threaten to stoke price increases.

Economists are split on whether policy makers will raise interest rates in 2008, with forecasts ranging from no increases to four. Alternative tools include boosting bank reserve requirements, already at a record high.

Li, the former party chief of northeastern Liaoning province, is being groomed to replace President Hu Jintao in five years, the academics say. They say former Guangdong party secretary Zhang Dejiang, 61, may become a vice premier with an economic policy role, also under Li's oversight, and Ma Kai, 61, the head of China's economic planning agency, may become secretary general of the State Council, China's cabinet.

`Balanced'

``Policies will be shifting from focusing on too hot towards a more balanced approach'' said Frank Gong, chief China economist at JP Morgan Securities (Asia Pacific). ``They will emphasize the need to maintain very stable and relatively strong growth.''

The failure to tame a surge in food prices since last year has led to stampedes, injuries and deaths at shops selling discounted cooking oil, rice and eggs, illustrating the toll on the 300 million Chinese estimated by the World Bank to be living in poverty.

``Inflation is clearly a big problem, the most destabilizing factor right now,'' said Xie. ``It's going to be a big challenge how to bring down inflation without a hard landing; achieving a soft landing is the most important task.''

Laurence Brahm, a Beijing-based lawyer who advised Wang from 2000 to 2002, depicts him as a forceful administrator who won't be afraid to use more direct intervention in the style of the former so-called command economy.

``He is heavy handed, very determined and no nonsense,'' Brahm said. ``Wang Qishan's office is not going to worry about the correct or incorrect thing to do in the market economy or how global investors view it. They're not going to care.''

Still, Straszheim can't see China escaping the effect of weakening demand from Japan, the U.S. and Europe. He said he expects government warnings about economic overheating to fade by the middle of the year.

``When those economies slow, that is going to slow demand for China's exports and hurt its economy,'' he said. ``That is brewing right now.''

To contact the reporter on this story: Kevin Hamlin in Beijing on khamlin@bloomberg.net

Last Updated: March 3, 2008 12:32 EST