China said on Wednesday it would strive to keep this year's CPI rise around the 4.8 percent of 2007amid increasing inflationary pressure.

Premier Wen Jiabao, in a report to the First Session of the 11th National People's Congress, said China would "keep structural price increases from turning into significant inflation."

Last year, China's consumer price index (CPI) rose 4.8 percent year-on-year, the highest since 1997 and well above the 3 percent target, mainly due to rises in the cost of food and housing.

In January, China's monthly CPI rose by 7.1 percent, a result of price increases during the Chinese Lunar New Year and the severest winter weather attacking central, southern and eastern China in five decades.

Analysts attributed China's structural prices increases to the rising pork prices in the country and climbing costs of primary products on the world market.

Climbing prices of food, particularly pork and vegetable oil, caused a direct 4 percent of CPI rise last year.

Food price hikes were again to blame for 80 percent of January's 7.1-percent CPI rise.

"We believe prices will be stabilized in the second half of this year by increasing subsidies and investment in agriculture, and building up reserves of pork and other commodities in short supply," said Li Daokui, an economist with Beijing's Qinghua University.

Some countries have expressed concern that China's inflation might affect the world.

But Zhuang Jian, a senior economist with Asian Development Bank China Resident Mission, said grain and oil price increases on the world market were important structural factors that drove up China's CPI.

"People should read and analyze in an objective and rational manner the target set by the Chinese government and its influence on the world," he said.

The 4.8-percent CPI target, he said, was practical and showed the Chinese government's determination in macro regulation.

Despite domestic price increases, China's low labor cost has helped stabilize export prices. Chinese textile products, for example, have even witnessed price cuts on the world market.

To curb domestic price hikes, Wen announced a series of measures, including expanding production of grain, meat and other consumer goods, restricting industrial use of grain and grain exports, increasing import of consumer goods in short supply and aiding the low-income population.

Provincial governors and mayors will be held responsible for grain and nonstaple food supplies, according to Premier Wen.

Lin Zhelong, a NPC deputy from the eastern province of Fujian, said he and his fellow peasants pinned hope on the government's macro regulation. "We have clearly felt the pressure of price hikes, and certainly hope the situation won't get worse."

Many political advisors and lawmakers attending the ongoing annual parliamentary session voiced calls on the government to protect the interests of low-income earners, who are affected most by the growing inflation.

A recent survey on the urban families' income levels indicates that the average disposable income of the poorest 10 percent of urban families grew by 6 percent between 2001 and 2006, compared with a 15-percent rise for the richest 10 percent of families surveyed.

The income rise for the poor families, however, was nullified by last year's 4.8 percent CPI rise, particularly the 11 percent price hike for food, as they had to spend 60 percent of their income on food, compared with 20 to 30 percent for the rich families.

"Premier Wen dedicated a considerable portion of his report to price controls and macro regulation," said NPC deputy Wang Xianrong. "We need to see how these measures are implemented to tell whether they are effective."

The People's Bank of China, the central bank of the country, has said it will keep the tight monetary policy unchanged to rein in growing inflation.

The central bank had taken a series of measures such as raising the reserve requirement ratio 11 times and the benchmark interest rates six times since last year to absorb excess liquidity and the measures had played a positive role in slowing down the inflation growth.

Editor: Yan