BEIJING (AFP) -- China's retail sales are forecast to pick up growth in 2007, increasing 14.5 percent from a year earlier in nominal terms, as people earn more money to spend, state media said Monday.

Rising incomes will boost retail sales in the world's fourth-largest economy to 8.7 trillion yuan (1.1 trillion dollars), the China Securities Journal said, citing a report by the China General Chamber of Commerce.

In 2006, retail sales recorded a nominal growth of 13.7 percent, according to previously published statistics. Expectations of a pickup are based on fast and steady growth in residents' disposable income, the report said.'

A government pledge to extend free compulsory education to more children in rural areas will also release some potential spending power, it added.

China's retail sales jumped 14.7 percent in nominal terms, without the adjustment of inflation, to 1.5 trillion yuan in the first two months of this year, according to the National Bureau of Statistics.

The commerce chamber is an industry organization under the Ministry of Civil Affairs with more than 71,500 member companies.