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Last Updated: Monday, 13 September, 2004, 05:42 GMT 06:42 UK
China inflation rate stays high
China construction project
Big construction projects are fuelling China's boom
Chinese inflation ran at 5.3% for the second consecutive month in August, according to official figures.

The figure fell just short of the 5.4% rate forecast by economists.

But the persistently high rate of price growth has cast doubt over the government's efforts to rein in the booming economy.

A report from state-run news agency Xinhua said the success of the government's cooling-down policies now appeared "doubtful."

Soft landing?

Beijing has been trying to take some of the heat out of the economy since April, amid fears that the country's long-running boom was accelerating out of control.

Official efforts to reduce growth to more sustainable levels have focused on tightening credit conditions in order to reduce speculative investment in major construction projects.

The latest inflation figures have re-ignited speculation that the authorities may now raise interest rates - a move they have so far avoided.

Doubts over the government's attempt to put a brake on growth first emerged over the summer, when official figures showed that the economy expanded by 9.7% in the first half of the year - well above the full-year target rate of 7%.

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