China's April Inflation Likely at 8.1%, Business Journal Says

By Janet Ong

May 4 (Bloomberg) -- China's consumer prices likely rose 8.1 percent in April, slowing from a month earlier, after prices of some agricultural products fell, the China Business Journal reported, citing unidentified people.

Inflation is mainly driven by food prices, and as long as it remains stable, China shouldn't take steps to suppress economic growth, Liu Yuanchun, a professor at Renmin University of China, said in the Chinese-language report.

Consumer prices rose 8.3 percent in March, easing from 8.7 percent growth in February, the highest rate since May 1996. The government has a full-year target of 4.8 percent.

China is unlikely to increase interest rates in the second quarter because such an attempt to slow growth may cause economic volatility, the report said, citing Chen Jijun, an analyst at Citic Securities Co. The government's strategy will likely focus on using the bank's reserve ratio and open market operations to tighten liquidity, the report cited Chen as saying.

To contact the reporter on this story: Janet Ong in Beijing at jong3@bloomberg.net

Last Updated: May 3, 2008 22:36 EDT

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