China's chronically high inflation eased slightly in December, giving Beijing more room to stimulate a slowing economy, but politically sensitive food prices rose sharply.
Consumer prices overall rose 4.1 per cent, down from the previous month's 4.2 per cent but still above the government's 4 per cent target for the year, data showed Thursday. Inflation in food costs accelerated to 9.1 per cent from November's 8.8 per cent.
Lower inflation could clear the way for Beijing to cut interest rates or take other steps to stimulate slowing economic growth. But Chinese leaders might feel constrained by the jump in food costs.
Inflation that analysts blamed in part on the multibillion-dollar stimulus that helped China avoid the 2008 global crisis has declined steadily since hitting a 37-month high of 6.5 per cent in July.
Beijing hiked interest rates repeatedly and tightened investment curbs in late 2010 and early 2011 to cool its overheated economy, but then reversed course after plunging global demand battered exporters.
Officials have promised more lending to help struggling exporters and entrepreneurs who have slashed jobs, raising the threat of unrest. The extent and potential impact of those measures is still unclear.
The rise in food costs, which account for up to half of monthly spending for poor families, was driven by a 21.3 per cent jump in the price of pork, the country's staple meat, and a 6.9 per cent jump in grain prices.