“Strategic economic restructuring will be accelerated and stabilising price levels will be given a more prominent position,” state media reported at the end of yesterday’s Central Economic Work Conference in Beijing.
Consumer prices rose by 5.1 per cent in November compared to the previous year, the sharpest rise since July 2008.
And earlier this month the government was forced to admit that they may revise up their target rate to four per cent, from the current three per cent target.
Last week the People’s Bank of China (PBoC) increased the reserve requirement ratio (RRR) for banks for the sixth time this year, and the third time in the last five weeks.
The hike further increases the amount of funds that lenders must keep in reserve, impounding around RMB350bn (£33.3bn) at the central bank, according to analysts at Barclays Capital Research.
The anlaysts forecast three policy rate hikes of 0.25 per cent each between now and mid 2011.
From 20 December, the RRR for large banks will increase to a record 18.5 per cent, with smaller banks required to deposit 16.5 per cent.
FAST FACTS | CHINESE INFLATION
● November’s inflation of 5.1 per cent is up from 4 .4 per cent in October.
● In November food inflation hit 11.7 per cent.
● Non food inflation increased from 1.6 per cent in October to 1.9 per cent.