China’s consumer price index will likely rise 4.2-4.3% in 2011, surpassing the government’s target of a 4% increase, the People’s Bank of China adviser Li Daokui said on Monday, Dow Jones reported. Li added he is concerned about inflation in the next five to 10 years, suggesting that Beijing should adopt a relatively tight monetary policy and loose fiscal policy. Interest rates should be increased gradually, he said. The CPI rose 5.3% in April from a year earlier – marginally slower than the 5.4% in March – stoking concerns about further tightening policies. In its efforts to slow inflation, the PBoC has raised banks’ reserve requirement ratio five times in 2011 and six times last year, while interest rates have been increased only four times since October.
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