A STATE Planning Commission recommendation on a moderate growth rate for next year is expected at a national planning work meeting to be convened in about a fortnight. Sources in Beijing said economists at the commission would back a growth rate of nine per cent for 1995. The authorities also have decided to restrict inflation to no more than 10 per cent, although many mainland economists predict next year's inflation rate will remain at 20 per cent. Inflation, at a record 27.7 per cent last October, has shown no sign of abating. 'Twenty-plus per cent inflation is a painful reality,' one source said. 'From the central Government's resolution, the leadership really wants to squeeze inflation to under 10 per cent.' The battle against inflation was high on the agenda of the National Work Meeting on the Economy which ended in Beijing last week. Chinese sources said the Communist Party leadership had opted for a relatively cautious development strategy in view of persistent signs of the economy overheating. They said the key to next year's development was in containing the scale of investment, particularly the accumulation of capital. However, since China has come under heavy pressure to relax its tight money policy, the authorities are expected to announce selective loosening of credit to preferred sectors. Last week's meeting stressed that the regions and various enterprises must heed Beijing's demand for non-inflationary growth by adhering to stricter central control of the economy. At the proposed work conference this month, specific target figures for growth and the retail price index will be tabled for discussion among provincial leaders and heads of various ministries. Chinese economists said fear of social unrest triggered by inflation had made it easier for the cautious wing of the leadership to impose the mild growth rate target. The more radical reformers in the party have been lobbying for a growth rate of 10 per cent or more, repeatedly recommended by patriarch Deng Xiaoping. But in order to sustain a 'stable and healthy development', emphasis was shifted to areas like health and stability rather than speed of change, sources said. Meanwhile, the State Commission for the Reform of the Economic Structure has urged ailing state enterprises to shoulder the huge debts which remain the main obstacle to a series of key reform measures on enterprise. According to a dispatch from the semi-official China News Service yesterday, a commission official said new measures should be imposed to solve the problem. He said profitable enterprises should set up reserve funds for possible future debts resulting from bad investments, while debt-ridden enterprises should be 'well-vetted' by banks before loans were extended to cover the debts. Finance departments could issue special bonds to the banks which paid debts of those enterprises which ran into problems due to 'circumstantial factors'.