SHANGHAI (Reuters) - China's economy is expected to grow 7 percent to 8 percent this year and next, and will begin to recover in 2010, influential People's Bank of China adviser Fan Gang said on Wednesday.

"In 2010, with government policies starting to take effect and external markets beginning to stabilise, various kinds of domestic demand will prop up growth," Fan told a financial conference in Shanghai.

"China's economy will be less reliant on government policies. Corporate investment and real estate investment will recover," he said.

Fan had said last month that China's economy had reached a bottom and would still achieve growth this year of 7 or 8 percent, helped by the government's 4 trillion yuan (S$862.3 billion) stimulus plan.