SHANGHAI - China, the world's third-largest gold producer, is likely to surpass the United States to become the second-largest producer of the precious metal in 2007, a senior Chinese industry official said on Friday.

China plans to raise its gold production by 8.3 percent to 260 tonnes in 2007 amid strong international prices. Gold prices hit a 25-year high last year.

Domestic demand was seen in line with production at 260 tonnes this year, supported by the jewelry sector, Wu Junyun, vice general manager of the international trading arm of the China National Gold Group Corp., told reporters on the sidelines of a conference in Shanghai.

China's gold output rose 14 percent in the first four months of this year to 77.75 tonnes, extending a 7 percent increase in 2006 when it hit a record of 240 tonnes, data from the China Gold Association showed.

The World Gold Council has put China's gold consumption at about 240 tonnes in 2006.

The state-owned China National Gold Group, one of the country's leading gold producers, produces about 20 percent of the country's total.

Wu said the company was interested in gold mining in neighboring countries, including Myanmar and Vietnam as well as in Russia and other central Asian countries, although he gave no details.