Large Medium Small China's central bank governor Zhou Xiaochuan said Tuesday that targets of the country's monetary policy should include reforming the prices of resources and energy, in addition to controlling inflation.

"If (we) only consider (curbing) high inflation, (we) would hinder those reforms," he said at a financial forum.

China has been pushing reforms in its pricing of resource products and energy, such as electricity, natural gas and water. But as its consumer inflation began to pick up in November amid the country's quicker-than-expected economic recovery, many fear such reforms would lead to serious inflation next year.

China's consumer price index (CPI), the main measure of inflation, rose by 0.6 percent in November from a year ago, the first increase since January, triggering worries that inflation could continue to rise into next year.

Meanwhile, China has raised prices of water and electricity in its efforts to make prices of those products better reflect market demand and save energy. Zhou Fengqi, consultant of the energy research institute of the National Development and Reform Commission, said China is set to raise the price of natural gas next year.

"Seen from the November statistics, price rises are gaining momentum, which could translate into much more inflationary pressure next year," said Dong Xian'an, chief macroeconomic analyst of Industrial Securities. He said China's CPI could exceed 3.5 percent next year.

Zhang Xiaojing, senior economist of the Chinese Academy of Social Sciences, said the figure would not exceed 4 percent.

China has not released its target for managing inflation next year.

Zhou of the central bank also said China's monetary policy is targeted at four goals: low inflation, economic growth, maintaining high employment and international balance of payments.

(chinadaily.com.cn December 23, 2009)