China May inflation rises, industrial growth slows

China's inflation edged higher in May amid signs the third-largest economy's rapid rebound from the global downturn is slowing.

Consumer prices May rose 3.1 percent from a year earlier, accelerating from April's 2.8 percent rate, the National Bureau of Statistics said Friday. That was driven by a 6.1 percent rise in politically sensitive food costs, up from April's 5.8 percent gain.

Higher inflation in recent months has prompted concern Beijing might hike interest rates to cool economic growth that surged to 11.9 percent in the first quarter. The government's inflation target for the year is 3 percent but the government has not said what steps it might take if price rises exceed that level.

A statistics bureau spokesman said the government has prices under control.

"Although there are quite big pressures, it is possible to achieve the annual inflation target of 3 percent with our efforts," the spokesman, Sheng Laiyun, said at a news conference.

Other data reported Friday by the bureau showed economic activity slowing slightly but still expanding at double-digit annual rates.

Investment in factories and other fixed assets - watched closely by economists as an indicator of future growth - rose 25.9 percent, but that was down from April's 26.1 percent expansion. Growth in industrial output slipped to 16.5 percent, down from the previous month's 18.8 percent rate.

Wholesale inflation also accelerated in May to 7.1 percent, up from April's 6.8 percent, suggesting shoppers might face higher prices as retailers pass on rising costs.