Economist sees moderate China price hikes

BEIJING, March 20 (UPI) -- Careful management should keep the increase in the Chinese consumer price index at no more than 3 percent this year, a top economist said.

Yao Jingyuan, chief economist at the National Bureau of Statistics, said during the past 30 years China has experienced inflation when three factors converged: economic overheating, heavy borrowing and a crop failure, Xinhua, the official government news agency, reported. He said harvests have been good for the past six years, providing an "important stabilizer" for the economy.

But he warned China now depends on the international market for many important commodities, including oil and iron. Price increases there would ripple through the economy.

In February, the government reported a 2.6 percent 12-month increase in the CPI. Last year, the country had negative inflation for nine months ending in November, when prices rose .6 percent.