China's consumer price index rises 4.8% in 2007
Updated: 2008-01-24 10:24
"Generally speaking, China is not alone. The new round of inflation is a global trend," he said.
Money supply also lifted prices, he added. M2, a broad measure of money supply, was 40 trillion yuan (about $5.5 trillion) last year.
The NBS also reported a 2007 trade surplus of $262.2 billion, up $84.7 billion from 2006. Foreign exchange reserves surged 43.3 percent to $1.53 trillion by the end of 2007.
With an eye on inflation risk, China has stepped up tightening moves.
A week ago, the central bank announced it would raise the bank reserve requirement ratio by half a percentage point to 15 percent effective January 25, the first raise for this year. The bank raised the reserve ratio 10 times last year as part of an effort to reduce excessive liquidity.
A record 1.27 trillion yuan worth of central bank bills, which had been issued to commercial banks to curb lending, are due to mature in the first quarter, according to government figures.
The State Council, or the cabinet, also announced earlier this month that the central government would temporarily intervene in the prices of daily necessities under the Price Law.
It promised not to raise the prices of key commodities or services such as energy (gasoline, natural gas and electricity) as well as utility charges (gas, water and heating) and urban public transport. It also promised strong penalties on those who drove up prices through hoarding or fraud.
"We are facing an arduous task in reining in prices this year. Even if there are no new factors to [increase] prices, the lingering effects of last year's hikes [will continue to exert] great pressure," Xie said.
"The Party and the government have listed price curbs as an important task, which I think is at the core of our economic problems and will take effect after a period of time," he said.
"The tightened monetary policies will help balance supply and demand. Prices of meat and poultry will expect slower growth or even a light drop in the latter half of this year as production rebounds," said Zhang Liqun, a researcher on macroeconomy with the Development Research Center of the State Council.
The Chinese government has been offering pig breeders subsidies and insurance to boost their enthusiasm and offset the pork shortfall.
The country's inflation rate was kept within a desirable range over the past few years at 1.2 percent in 2003, 3.9 percent in 2004, 1.8 percent in 2005 and 1.5 percent in 2006. The previous record for annual CPI increase was 8.3 percent in 1996.
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