HONG KONG - The Chinese government should avoid introducing drastic tightening measures to curb its rapid economic growth and take a gradual approach, the Asian Development Bank said Thursday.

The bank also raised its forecast for China's economic growth this year to 11 percent from 9.5 percent, partly due to increased public spending linked to the 2008 Beijing Olympics.

For emerging East Asia as a whole, economic growth this year will likely come in at 8.1 percent, up from a previous forecast of 7 percent, even as growth in countries outside of China is expected to moderate slightly, the Manila-based bank said semiannual Economic Monitor report.

In 2008, the region will likely grow a collective 7.9 percent, it said. Emerging East Asia comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, China, Hong Kong, Taiwan and South Korea.

Lee Jong-wha, head of the bank's Office of Regional Economic Integration, said the Chinese government should use gradual measures to curb strong investment and asset price inflation _ and that so far, it has done so.

"The government should avoid implementing drastic measures, even though the state would like to calm down domestic demand," Lee said in a press conference in Hong Kong.

Lee said Beijing should implement tightening measures "step by step."

Beijing has launched a series of tightening measures to curb the accelerating economy over the past year. The latest came last Friday as China's central bank raised the one-year benchmark deposit and lending rates by 27 basis points each.

The government also cut taxes on interest income from 20 percent to 5 percent _ a move seen as to encourage investors to keep money in banks rather than invest in the surging local stock market.

The banks also projected economic growth for Cambodia this year will reach 9.5 percent, and in Vietnam 8.3 percent. The slowest economic expansion in east Asia is expected from Thailand, with a GDP growth rate at 4 percent.

It also predicted Japan's 2007 economic growth at 2.3 percent.