CHINA'S industrial production growth may slow to about 10 percent in the second half of the year, compared to an average increase of 17.6 percent in the first six months, according to Xin Guobin, a department head at the Ministry of Industry and Information Technology.

Making the forecast at a press conference in Beijing yesterday, Xin said his judgment was based on the slowdown in China's manufacturing sector, whose output registered its smallest increase in 11 months in July - 12.8 percent.

"Economic growth will cool further in the later half," Xin said. "Demand-dampening curbs on housing speculation and energy consumption, less fixed-asset investment, an uncertain outlook for exports, and a higher base for comparison will work together to soften industrial output in the following months."

He said the key tasks for the second half should include keeping macroeconomic policies stable and further expanding domestic demand to secure resilient industrial growth.

But at the same time, China should speed up the phasing out of outdated production capacity and accelerate energy conservation in a bid to revamp the country's economic structure, Xin said.

China's official Purchasing Managers' Index, a comprehensive gauge of industrial activity across the country, was 51.7 percent last month, up from 51.2 percent in July. A reading above 50 points to expansion.

However, some analysts said this was mainly due to seasonal factors.

Wang Qing, a Morgan Stanley economist, expected industrial output growth to continue to weaken to 12.8 percent in August, given harsher curbs on energy-intensive projects.

According to a list released by the Ministry of Industry and Information last month, outdated capacity of more than 2,000 enterprises should be closed down before the end of this month. Meanwhile, the National Development and Reform Commission has halted favorable electricity prices enjoyed by energy-inefficient companies.