Nov. 5 (Bloomberg) -- China should avoid pursuing “excessive growth” so that the nation can keep inflation under control as the economy recovers, said Yao Jingyuan, the statistics bureau’s chief economist.

“China can keep inflation in check if we avoid chasing excessive growth in the fourth quarter and in 2010,” Yao said in the online transcript of a speech at a Beijing forum today. “Now that China’s growth rate is assured, we should put more of our resources into rebalancing and restructuring China’s economy.”

China’s cabinet signaled last month that inflation concern will play an increasing role in policy making as record lending adds to the risk of asset bubbles and consumer-price rises in the world’s third-biggest economy. The government may tighten monetary policy next year by imposing lending quotas on banks, according to UBS AG and Royal Bank of Scotland.

“With a strong recovery now underway in China, attention is increasingly being paid to the potential consequences of the super-loose monetary and fiscal policies and the attendant exit strategies,” said Wang Qing, chief Asia economist for Morgan Stanley in Hong Kong.

China’s economy is assured of expanding 8 percent in 2009 from a year earlier, meeting the government’s target, according to Yao. Jiao Jinpu, an official at the central bank’s graduate school, told another forum that exports may have returned to growth last month. China’s exports fell 15.2 percent in September from a year earlier.

Faster Growth

Gross domestic product rose 8.9 percent in the third quarter from a year earlier, the fastest pace in a year, after the economy bounced back from the weakest growth in almost a decade. Consumer prices fell 0.8 percent in September from a year earlier, the smallest drop since declines began in February. Prices rose 0.4 percent in September from August.

Chinese manufacturing data for October showed the nation’s recovery strengthening and export orders climbing, giving policy makers more room to pare stimulus measures in coming months. Manufacturing expanded at the fastest pace in 18 months, according to a purchasing managers’ index released by HSBC Holdings Plc and also a government-backed PMI.

China’s exports may grow by 8 percent to 10 percent in 2010, Liu Shijin, deputy director of the State Council’s Development Research Center said in Beijing today. The nation will face the challenge of excessive liquidity next year and needs to make policy more flexible, Liu said.

2010 Forecast

The Chinese economy may grow 10.5 percent next year, said Chen Dongqi, deputy economic research head at the National Development and Reform Commission. He said investment may contribute 6 percentage points of the expansion, down from 7.3 percentage points so far this year.

Consumption may continue to account for 4 percentage points of growth, while net exports may add 0.5 percentage points, after shaving off 3.6 percentage points so far this year, Chen said.

In contrast with Yao’s concern, Chen said China can see high growth with relatively slow inflation.

For Related News and Information: Most-read stories on China: MNI CHINA 1W <GO> Most-read China economy stories: TNI CHECO MOSTREAD BN <GO> For top economic news: TOP ECO <GO> For top China news: TOP CHINA <GO> Credit crunch page: WCC <GO> Government relief programs: GGRP <GO>

Last Updated: November 5, 2009 04:44 EST