China must be “on high alert” against inflation, central bank governor Zhou Xiaochuan said yesterday, striking a hawkish tone at his most important news conference of the year.
Speaking the week after China reported a jump in inflation to a 10-month high of 3.2 per cent, Mr Zhou said the increase in prices had been larger than expected and that experience had taught him not to delay the fight against inflation.
His comments were the latest sign that Beijing is willing to tolerate slightly slower growth in order to keep prices and the property market in check. After growing 7.8 per cent in 2012, its weakest year in more than a decade, China’s economy is on track to grow more quickly this year but policy tightening could limit the size of its rebound.