China's economic growth will probably slow to 8 percent in 2012 and further to 7 percent in 2013 even though the government has started to relax policy, a prominent Chinese government economist said on Thursday.

Wang Jian, a researcher with the National Development and Reform Commission, the top economic planning agency, said China's latest move to lower the reserve requirement ratio for its commercial banks signaled only modest policy easing.

Even though economic growth is slowing, the pace of the slowdown is still gentle. So I reckon there won't be any dramatic policy shift for now since we cannot easily change interest rates, Wang told Reuters in an interview.

The economy grew 9.1 percent in the third quarter, slowing from 9.5 percent in the second quarter and 9.7 percent in the first. Growth in the fourth quarter is almost certain to dip below 9 percent.

Wang said he saw an increasing risk that economic growth would dip below 8 percent in the fourth quarter of 2012, which could prompt more aggressive policy measures, such as an interest rate cut.

If GDP growth falls below 8 percent, we will see a sharp policy reversal, he said.

Analysts typically view growth of 7 to 8 percent in China as the bare minimum needed to generate jobs to absorb the urban influx of rural workers and preserve social stability.

China's central bank said on Wednesday it was cutting banks' reserve ratios for the first time in nearly three years to ease credit strains and shore up the slowing economy.

Most economists believe the cut marked the start of a policy easing cycle, and that the central bank is likely to lower the reserve ratio further to unleash lending and support growth.

Chinese leaders are likely to maintain prudent monetary policy next year, but the underlying tone has become more pro-growth, Wang said, cautioning that inflation remains a concern.

China has been walking a tightrope between fighting inflation and stabilizing growth, Wang said.

Now inflation pressures are easing but have not disappeared. We won't put too much emphasis on fighting inflation but we cannot easily lower our guard, he said.

Wang predicted annual consumer inflation in 2012 would stay elevated near 5 percent due to persistent pressures from higher costs of agricultural products.

Annual inflation dipped to 5.5 percent in October from September's 6.1 percent, pulling back further from July's three-year peak.

With the global landscape darkening, strong investment growth will be the key economic driver next year given that there is limited room to boost domestic consumption, Wang said.

(Reporting by Shen Yan and Kevin Yao; Editing by Catherine Evans)

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