China?s unexpectedly high 9.8 per cent GDP growth in the fourth quarter of last year and rising inflation rates have renewed concerns here about the economy?s overheating, and raised the prospect of a slew of fresh tightening measures in the coming year.

Boosted by strong fourth quarter growth, China?s economy expanded 10.3 per cent growth in 2009, achieving double-digit growth for the first time since the financial crisis, according to official data released this week. China?s economy grew by 9.6 per cent in 2008 and 9.2 per cent in 2009, driven by the government?s $ 586 billion stimulus plan, which was unveiled in November 2008.

In China, the figures were greeted more with caution than celebration, with the numbers indicating rising inflation and record increases in bank lending, which has worried regulators.

The Consumer Price Index (CPI), the country?s main gauge of inflation, increased 4.6 per cent in December, taking this year?s figure beyond the government?s 3 per cent target, to 3.3 per cent. In November, the CPI rose 5.1 per cent, the highest in more than two years, while food prices recorded an 11.7 per cent increase. The Chinese government has often laid particular emphasis on controlling food prices, seen as a key instrument of ensuring social stability.

Inflation has been driven partly by record bank lending, which reached 7.95 trillion yuan ($ 1.19 trillion) in 2010, exceeding the government?s 7.5 million yuan target. ?Money supply expanded at a remarkable rate,? Alistair Thornton, China analyst at IHS Global Insight, told The Hindu. ?Until that is scaled back, we are not going to see pressure recede either for CPI or asset markets.?

Concerned by surging housing prices and the prospect of asset bubbles, the Chinese government has unveiled a series of tightening measures in recent months. The People?s Bank of China, the central bank, as raised interest rates twice in recent months, while also increasing reserve-requirement ratios of banks six times.

The measures, analysts say, have only had limited effect. ?The annual targets keep getting overshot,? Mr. Thornton said, adding that the government was now considering tighter regulatory measures, such as monitoring and fining banks on an individual basis and instituting monthly targets.

Ma Jiantang, director of the National Bureau of Statistics, said there had been some progress in taming prices in December, but the economy still faced inflationary challenges. He also blamed the United States

Federal Reserve?s $ 600 billion bond-buying move to weaken the dollar, known as quantitative easing, for worsening the problem by rising prices of international commodities. ?We should not relax on prices in 2011,? he said.

Analysts said the Chinese government would focus more on reining in inflation, rather than driving growth, in the coming year. ?The acceleration of growth in the fourth quarter showed that the economic growth rate would be off the agenda for Beijing,? Hua Zhongwei, an analyst with Huachuang Securities in Beijing, was quoted as saying by Reuters. ?In other words, taming inflation will be the sole priority for Chinese economic policies.?