Rising consumer price indices in China, do not indicate impending inflation, a senior official said on Monday.

In an interview with Xinhua, Cao Changqing, director general of the Department of Prices of the National Development and Reform Commission (NDRC), said current price hikes in China are viewed as structural rises, emphasizing that not every sector had seen price hikes.

China's CPI, a key inflation indicator, rose by 5.6 percent on the back of food price hikes in July, a 33-month high. The figure went up 4.4 percent in June and 3.4 percent in May.

Rises in the prices of foodstuffs, which account for about one third of China's CPI, were the major driving force behind the index rise.

Cao said price hikes for foodstuffs during the first seven months of this year rose 8.6 percent, which pushed up the CPI during the same period by 2.9 percentage points, while housing price hikes helped increase the CPI by 0.5 percentage points.

July was the fifth consecutive month the CPI rose by more than three percent, the government-set alarm level for the current year. Most economists predicted the figure for the whole year would stand at around four percent, or between four percent and five percent.

Over the past few years, China's economy has traveled along a path of "high growth, high efficiency and low inflation". The CPI went up 1.8 percent in 2005 and up 1.5 percent in 2006. But the situation has changed dramatically this year.

Economists say price hikes for foodstuffs are a result of grain price rises.

On August 14 average procurement prices for rice, wheat and maize rose by 8.4 percent and, in 36 major cities, prices were up 79.4 percent on the same day of last year for pork.

Cao said price hikes for foodstuffs were driven by cost rises, a result of mounting grain prices, while short supply is the additional factor for rapid rises of pork prices.

(Xinhua News Agency August 21, 2007)