China says inflation under control, growth strong

Customers shop for vegetables at a supermarket in Shenyang, Liaoning province September 11, 2010.

BEIJING (Reuters) - Inflation in China will stay under control in the coming months, while economic growth will remain strong as the private sector kicks into gear, China's economic planning agency said on Wednesday.

"China's economy is gradually moving towards a market-driven mode from a stimulus-driven one," the National Development and Reform Commission (NDRC) said in a statement on its website (www.ndrc.gov.cn).

China's consumer price index hit a 23-month high of 3.6 percent in the year to September, and analysts said high inflation, coupled with rising asset prices, was a key reason for the central bank's surprise increase of interest rates last week.

China has set a 3.0 percent target for average inflation over 2010.

Growth in the third quarter was 9.6 percent from a year earlier. This was well above the government's target of 8 percent for 2010, though it marked a slowdown from a 10.3 percent pace in the second quarter and 11.9 percent in the first quarter.

In the statement, which was a summary of an NDRC meeting with officials from 13 provinces, the agency said growth in some provinces may slow further, partly due to increasing pressure from Beijing to meet emission reduction targets.

NDRC added that some Chinese provinces are facing difficulties in fulfilling targets in "energy saving and pollution reduction". It did not mention any of the laggards by name.

(Reporting by Zhou Xin and Kevin Yao; Editing by Simon Rabinovitch)