China's top think tank, the Chinese Academy of Social Sciences(CASS), says that the countr's economy is expected to slow down to 9.8% in 2008 and further decline to 9.3% in 2009.

    In its annual Blue Paper on China's economy, which was released on Tuesday, CASS noted the Chinese economic downturn is mostly attributed to the global financial crisis.

    The Blue Paper also notes that housing prices will fall dramatically in a short period of time, and subsequently enter a rather long adjustment period in 2009.

    Economists from CASS believe the real estate industry will be bogged down throughout 2009 as demand weakens under high prices and the global financial crisis. Homebuyers and investors will be more prudent in their activities. Suppliers will also experience a chilly season next year as some small and medium-sized enterprises with limited capital are forced to leave the market.

    Risks will increase as some homebuyers become unable to pay their mortgages and some builders will not be able to pay workers to complete projects.

    On the country's employment front, the Paper adds that one million college graduates will be unable to find jobs by the end of 2008, a problem that will be exacerbated when more people may lose their jobs in 2009 as more than five million new graduates begin seeking employment the same year.

    The Paper says the disposable incomes of urban and rural residents will still increase in 2008 and 2009, but at slower rates.