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Last Updated: Monday, 11 December 2006, 08:09 GMT
Consumer inflation rises in China
Shoppers in Shanghai
The rise in inflation is the biggest since the turn of the year
Chinese consumer inflation picked up pace in November, led by higher prices for food, data from the National Bureau of Statistics show.

Annual consumer inflation was 1.9% in the month, up from 1.4% in October.

The increase was the biggest since a similar rise in January, but then the figure was boosted by extra consumption for the Lunar New Year holiday.

Food, which accounts for a third of items in the consumer basket used to measure inflation, rose 3.7%.

'Moderate inflation'

However, analysts believe overall price pressures remain in check despite blistering economic growth.

David Cohen of Action Economics in Singapore said the figures represented "continued moderate inflation".

"Chinese officials are satisfied with the way inflation has remained in check despite their concerns about potential overheating in the economy, and that should allow them to leave interest rates where they are for now," he added.

In the first 11 months of the year, consumer prices were 1.3% higher than in the same period last year, the statistics office said.

Non-food prices rose by 1% compared with a year before. The 3.7% annual increase in food prices compared with a 2.2% figure in October.

'Not appropriate'

Meanwhile China central bank governor Zhou Xiaochuan said inflation-targeting is inappropriate for the country at the moment.

In May, the International Monetary Fund said China should set a target of low inflation to provide an anchor for monetary policy, which would then allow a more flexible exchange rate.

"According to the current situation, it is not appropriate for China to adopt an inflation-targeting system," Mr Zhou, governor of the People's Bank of China, told a forum on Monday.

Ma Kai, head of the National Development and Reform Commission, told the state-run China Daily newspaper that consumer prices for the full year of 2006 are likely to be up 1.3%.

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