Meanwhile, in another report released by the central bank, 62.1 percent of 20,000 residents polled said they felt it difficult to accept the current level of inflation, which has increased by 3.6 percentage points quarter-on-quarter.

The consumer price index, the main gauge of inflation, hit a 10-month high in Feburary, with a reading of 3.2 percent from 2 percent in January, according to the NBS.

The rise in food prices, particularly, surprised many.

Chang Jian, an economist with Barclays'Capital, said: "We expect neutral monetary policy with a bias toward tightening liquidity through open market operations.

"The bank regulator, the China Banking Regulatory Commission, is already tightening regulations on wealth management products and local government lending, as we expected," Chang said.

The Government Work Report has set the country's annual growth target to remain at 7.5 percent, with a reduction in the inflation target to 3.5 percent, and money supply growth at 13 percent.

Liu Ligang, chief economist in China with the ANZ Banking Group Ltd, predicts that this year's GDP growth year-on-year may reach 8.1 percent, higher than last year's 7.8 percent.

"Fueling inflation, and potential asset bubbles in the property market, as well as the unbalanced financial system, will be the significant challenges for the new government," he said.

 

chenjia1@chinadaily.com.cn

 

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