China's retail sales are projected to climb 14.5 percent year on year to 8.7 trillion yuan (1.13 trillion U.S. dollars) this year, said the China General Chamber of Commerce.

The nation's retail sales jumped 14.7 percent to 1.45 trillion yuan in the first two months of this year, according to the National Bureau of Statistics. In 2006 its retail sales rose 13.7 percent to 7.641 trillion yuan.

The surge last year followed an average of more than 10 percent annual growth in real terms between 1997 and 2005, the chamber said in a report jointly released with the China National Commercial Information Center.

Retail sales will pick up speed this year with the residents' disposable income continuing to rise, according to the report.

It said Chinese income will be further boosted this year as the government are starting to offer free compulsory education in all rural areas, and expand minimum allowance, medical and pension insurances across the country.

Meanwhile, it said the consumer confidence index has maintained high since the end of 2006.