China sees inflation jump as blistering growth continues

China's turbo-charged growth eased slightly in the first quarter, while inflation jumped to a 32-month high, putting pressure on the government to do more to rein in prices and keep the economy on an even keel.

China's gross domestic product (GDP) increased by 9.7pc in the first quarter from a year earlier, down from 9.8pc in the final three months of 2010 but ahead of an expected growth rate of 9.5pc.

However consumer price inflation sped to 5.4pc in the year to March, the fastest since July 2008 and ahead of market forecasts for a 5.2pc increase.

Agricultural prices have been the main driver of Chinese inflation and that remained the case, with food costs up 11.7pc in the year to March. But there were also signs of a broadening of pressures, with non-food inflation up 2.7pc year on year, the fastest in more than a decade.

Taken together, the data published by the National Bureau of Statistics on Friday showed that the world's second-largest economy was still sizzling, little hindered by the central bank's half-year tightening campaign that many investors had feared would undermine growth.

"The figures show that [China's] inflation pressure will not taper off in the short term and we expect the consumer inflation to remain high in the second quarter," said Sun Miaoling, an economist with CICC, the largest Chinese investment bank.

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