China’s prime minister, Wen Jiabao, said this morning inflation tops the list of economic concerns this year and he set a target of reining in rising prices to 4.8 per cent.

Laying out the government’s priorities for the year, the prime minister did not shy away from giving details of the risks posed by inflation to China’s social fabric and double-digit growth, which has transformed the country into the world’s fourth-biggest economy.

He told the opening of the annual session of parliament, the National People’s Congress: “The current price hikes and increasing inflationary pressures are the biggest concern of the people.”

Efforts to moderate economic growth and to control the resulting inflation were repeated themes of his long speech, underscoring government worries that rising prices could undermine the growth that underpins the party's hold on power.

He set a goal of 4.8 percent for inflation for this year – the same level as in 2007 when the government missed the target of 3.0 percent set by Prime Minister Wen by a wide mark.

Annual consumer inflation hit an 11-year high of 7.1 percent in January amid signs pressure on prices was spreading from food to other parts of the economy.

Mr Wen said: "Because factors driving prices up are still at work, upward pressure on prices will remain great this year.”

He vowed powerful measures, calling for extending price controls already imposed on some foods, petrol, electricity and other scarce goods and resources.

Subsidies to farmers would be increased to encourage them to grow more food. Curbs would be imposed to reduce investment in factories, land and other fixed assets that are driving up demand.

While inflation has been largely absent in the past decade, it has periodically plagued China’s 30-year march towards free markets — at times triggering political unrest. Worries about food and housing costs fed into the pro-democracy demonstrations centred on Tiananmen Square in 1989.

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