China 2015 GDP growth to weaken to 7.1 pct: PBOC working paper

China's GDP growth is expected to slow modestly next year to 7.1 percent, but employment and inflation will remain stable, according to a central bank working paper.

"Real GDP growth will decelerate slightly to 7.1 percent in 2015, reflecting partly the slowdown in real estate investment," said a working paper written by a group of economists of the People's Bank of China (PBOC).

China's GDP growth for 2014 is estimated at 7.4 percent, according to the research group led by Ma Jun, chief economist of the PBOC's research bureau.

Inflation will be 2.2 percent next year, slightly higher than this year's estimated reading of 2.0 percent, said the paper posted on the PBOC's website.

China will see an easing fixed asset investment growth, stronger retail sales and faster export and import growth next year, said the paper.

According to their research, fixed asset investment growth will soften to 12.8 percent next year, down from an estimated expansion of 15.5 percent in 2014, dragged by slower investment into the real estate sector,

Retail sales growth will rise to 12.2 percent next year from an estimated pace of 12.0 percent this year.

Thanks to a recovery in the global economy, export growth will pick up to 6.9 percent next year from an expected reading of 6.1 percent this year. Meanwhile, import growth will accelerate to 5.1 percent next year from 1.9 percent this year.

The paper said the forecasts were made based on four factors -- GDP growth in developed economies picking up to 2.3 percent in 2015 from an estimated pace of 1.8 percent this year, falling global commodity prices and a stable world trade environment, China keeping continuity and stability in its monetary and fiscal policy, and a lack of large fluctuations in China's property market.

Risks to the forecasts include geopolitical factors such as the Ukraine crisis, as well as uncertainties associated with global commodity prices, the pace of the U.S. rate hike and China's real estate market outlook, said the paper.

China's job market will remain resilient next year as the proportion of the tertiary sector in the economy continues to rise by at least one percentage point, as seen in the past couple of years, said the paper.

Assuming the tertiary sector to GDP ratio adds one percentage point in 2015, the 7.1-percent growth forecast means China will add the same number of jobs next year as the new job figure for this year.

China's economic structure will be more balanced next year, with less reliance on investment and a greater boost by consumption, said the paper.

Consumption is expected to contribute 50.9 percent of GDP growth next year, up 0.9 percentage point from this year. Meanwhile, investment will account for 46.8 percent of economic growth, down 0.9 percentage point, while exports will contribute 2.3 percent.