Xie believed this round of price hikes was different from the previous ones, and represented a global trend.

Xie said in 2007, the CPI grew 5.2 percent in India and 9.4 percent in Russia, while the expected CPI growth rate of the United States was 2.8 percent. In the EU, the CPI also rose over 2 percent.

With this international trend, the domestic price hike pressure still exists in 2008.

Li Xiaochao, spokesman for NBS, warned that it was possible that the structural price hike would turn into real inflation in 2008.

The solution

Last year, the government adopted a series of measures, including distributing central reserve pork, wheat and edible oil, to control commodity prices. Meanwhile, the Chinese central bank frequently used monetary policies to ease inflationary pressure as well as the excessive liquidity brought about by price rises.

Xie said those measures had already taken effect. In 2007, the economic growth rate was 11.1 percent in the first quarter and 11.9 percent in the second quarter, but dropped to 11.5 percent in the third quarter and further fell to 11.2 percent in the fourth quarter. "This shows that overheated economic growth has been initially brought under control."

In terms of investment, growth in the third quarter was 25.3 percent, down 1.6 percentage points from the second quarter, and the growth rate continued to drop to 23 percent in the fourth quarter. The trade surplus also came down, with that in the fourth quarter dropping 37.9 percentage points compared with that of the third quarter.

"The growth of commodity prices was at a high level in the second half of last year," Xie said. "I think we will see some effect after those tightening measures."

This year, apart from the current tightening measures and temporary price controls, the NBS will reform its CPI calculation method and make it better reflect the issues which mostly concern the citizens.

Xie pointed out two features of the CPI calculation reform. On the one hand, it will collect CPI figures concerning low-income residents. "The purpose of making this change is to help governments at all levels better understand how prices influence local lower-income groups and take measures to subsidize them."

The NBS started collecting CPI data on lower-income groups in 13 cities in 2007, and will gather data in a further 90 cities and townships this year before introducing the practice nationwide.

Xie said that the second new measure is to improve the supervision over prices and that the NBS will conduct a survey on food price changes every 10 days from the previous once a month.

Zheng Jingping, chief engineer with the NBS, said the Engel coefficient (the proportion of food in total daily expense) of the Chinese people, especially the lower-income groups, is still high. "Therefore, the food price fluctuations will directly influence their livelihood and we must attach due importance to this," said Zheng.

Zheng said China is confronting inflationary pressures from all sectors. Surging consumer prices, property and securities prices, production prices from labor, land and raw materials, and rent are rising. The international crude oil prices and the prices of other raw materials are also running at high levels, adding more pressure to inflation.

"We must deal with the potential of inflation seriously," said Zheng.

However, Xie suggested citizens not be too concerned and overreact about commodity price rises.

Xie explained that CPI is decided by an average of several hundred commodities across the country, and it reflects the trend of the whole price level. "Different people are impacted differently by commodity prices and the price fluctuation range is also different in various regions," Xie said, "therefore, the CPI growth rate reflects the average level across the country, and our citizens should not be too worried about it.

"When we make relevant decisions on CPI, we will take the whole situation into consideration," said Xie.