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CHANGCHUN, Sept. 5 (Xinhua) -- Concerns of a surging oil price could mean the industrial restructuring and upgrading of China's industries, according to a United Nations Conference on Trade and Development (UNCTAD) official here on Friday.

"The commodity price hike has severely impacted the Chinese economy, but it also happens at a good time as China is facing industry restructuring challenges," Li Yuefen, the UNCTAD Debt and Development Finance Branch head, said.

Rising prices for raw materials and salary increases have made it increasingly difficult for China to rely on cheap labor for a competitive export edge, she added.

A slow economy is another challenge to the country.

The Geneva-based organization made public its annual Trade and Development Report (TDR) in Changchun, the northeastern Jilin Province capital. The world economy is forecast to slow its pace to grow 2.9 percent this year, 0.9 percent lower year-on-year, according to the report.

"In mid-2008 the global economy is teetering on the brink of recession," Yuefen said. The downturn after four years of relatively fast growth was due to a number of factors.

The report said there was a global fallout from the financial crisis in the United States, especially after the sub-prime mortgage crisis. At the same time, commodity prices were soaring and a number of countries were increasingly restricting monetary policies. China also had to contend with stock volatility.

Despite a slowdown, output growth in China this year was expected to expand about 10 percent, said Detlef Kotte, an UNCTAD Macroeconomic and Development Policies Branch official.

That growth is dependent on oil prices and may lead policy makers to restructure Chinese industries.

Li recommended less oil use and more effort towards technology upgrades in manufacturing.

The full TDR report is at www.unctad.org.