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China premier: Continue inflation fight

By Associated Press

12:10 PM EDT, July 6, 2008

BEIJING - China's premier called for continued vigilance against inflation that has reached 12-year highs, saying the government should ensure that price increases are "acceptable," a state-run news agency reported Sunday.

Premier Wen Jiabao, the country's top economic official, made the comments during a three-day tour of eastern China's Jiangsu province and the financial capital of Shanghai, apparently as a reminder for local officials not to get complacent.

Although China's economy is developing in the right direction, fighting inflation remained a major task, Xinhua News Agency cited Wen as saying.

All levels of government should work to avoid serious fluctuation in the economy, including efforts to make price increases "acceptable" for both industries and the public, Wen was quoted as saying.

Inflation jumped in mid-2007 as China ran short of pork, grain and other food items.

Consumer prices rose 7.7 percent in May over the same month last year. That was a slight decline from April's 8.5 percent rate but well above the government target of 4.8 percent for this year. Inflation in February was 8.7 percent -- the highest in 12 years.