China's foreign reserves will grow at a slower pace in 2007 as the appreciation of the yuan and the government's limits on foreign investment ease capital inflows, according to a commentary by a government researcher.

Weak international demand for Chinese products, the yuan's continued rise against the United States dollar, the removal of tax rebates for energy-consuming products and growing trade friction will shrink China's 2007 trade surplus, Zhang Liqun, a researcher at the State Council's Development Research Center, said yesterday in the China Securities Journal.

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