China's gross domestic product (GDP) growth is set to slow slightly in the second quarter to 9.8 percent from a year ago, against 10.2 percent in the first quarter, a top Chinese think-tank forecast on Tuesday.
China's consumer prices are likely to grow around 1.5 percent in the quarter, the State Information Centre said in a research report published in the official China Securities Journal.
The think-tank proposed tighter money supply to curb fixed investment, in particular excessive rises in property prices.
"We must raise the prices of capital, fine-tuning domestic interest rate benchmarks and appropriately raising bank reserve requirements," the research report said. "Currently, we should focus on too sharp rises in property prices."
China's M2 money supply, a measure of how much liquidity is available in the banking system, grew 18.8 percent in the 12 months to March, the same pace as in February and well above the central bank's 16 percent target.
A stronger-than-intended growth in money supply has triggered worries over a rebound in fixed asset investment, fanning an already racing economy and creating new bad loans for banks.
The think-tank also repeated calls for Beijing to curb its bulging foreign exchange reserves, brought about by the country's huge trade surpluses and foreign direct investment.
"The imbalance of international payments has created pressure for the yuan to appreciate," it said in the research report. "Heavy foreign trade surpluses and huge foreign exchange reserves has caused frequent trade frictions."
China's foreign exchange reserves, which reached a world record $875.1 billion at the end of March, are on track to hit $1 trillion by the end of this year, economists have forecast.
