China economic growth to rebound in H2 -BoCom

BEIJING, July 26 (Reuters) - China's economic growth will pick up slightly in the second half of the year due to strong domestic investment, the Bank of Communications (3328.HK: Quote, Profile, Research, Stock Buzz) (601328.SS: Quote, Profile, Research, Stock Buzz) said in a report released on Saturday.

"We believe China's economic growth rate will rebound to a level around 11 percent in the fourth quarter," the No. 5 Chinese lender said in the report.

Full-year gross domestic product (GDP) is expected to rise 10.6 percent in 2008, from the annual 10.4 percent in the first half, the report said.

"Fixed-asset investment will gain steam in the second half of this year due to massive reconstruction needs," Lian Ping, the chief economist of the Bank of Communications, said at a media briefing.

Over the next three years, at least 1 trillion yuan ($147 billion) of investment would be needed for rebuilding after the devastating Sichuan earthquake in May, he said.

Lain said the investment rebound would offset a slight weakening in exports in the coming months.

The bank's view was in line comments made on Friday by Su Ning, a vice central bank governor. Su said China would have robust economic growth in the second half.

China's Politburo said on Friday that maintaining stable economic growth and fighting inflation will be the priorities for the government in the second half of this year.

According to the bank's report, China's full-year inflation would stablise at 6.8 percent.