China sets 2008 inflation target at 4.6 percent

SHANGHAI, Jan 14, 2008 (AFP) – China has set an initial inflation target of 4.6 percent for 2008, up from three percent last year, state media reported Monday, reflecting a recent spike in the prices of consumer products.

The National Development and Reform Commission also set a target for economic growth this year of eight percent, the same as in 2007, the Shanghai Securities News reported.

“Our macroeconomic priorities this year remain to prevent overheating and to rein in inflation,” Xu Li, director of the commission’s finance department, told the paper.

China’s decision to hike the inflation target came after consumer prices rose 6.9 percent in November, marking the fastest pace in 11 years.

Inflation in recent months has been fuelled especially by rising prices of food items, including pork, the nation’s most important meat product.

Inflation has traditionally been a cause of concern for China’s government, as rising prices have historically triggered social unrest and anti-government protests. China’s economy is likely to have expanded by about 11.5 percent in 2007, marking the fifth consecutive year of double-digit growth.