The consumer price index rose 4.1 percent year-on-year in the first nine months of 2007, the Beijing Times reported, citing Chen Deming, vice chairman of the National Development and Reform Commission.

Although Chen did not provide a consumer inflation figure for September alone, the data would seem to suggest a relatively sharp rise during that month of about six percent, or twice the government's three-percent target for 2007.

In the eight months to August, consumer prices rose 3.9 percent from a year earlier, while for the month of August they rose 6.5 percent, bringing inflation to its highest single-month level in over a decade.

"We believe that August did not constitute the high mark for inflation this year," said Li Huiyong, a Shanghai-based economist with Shenyin Wanguo Securities.

"I wouldn't be surprised if the consumer price index sets new records for the year in the coming months," he said.

The official inflation data for September is not expected to be released until early next week when the government holds its quarterly economic briefing.

However, state media and officials have started quietly spreading the message that the fight against inflation is far from over. Rather, it may just be starting.

Speaking at a financial forum in Taipei, Chinese central bank assistant governor Yi Gang said he expected the full-year inflation figure to top four percent, according to the Shanghai Securities News.

If that prediction holds true, full-year inflation this year could be the highest since 1996, when it hit 8.3 percent.

China has responded by raising the interest rate five times this year, accompanied by eight hikes in the required reserve ratio, telling banks to keep more funds in reserve.

That has not stopped the world's fourth-largest economy expanding by 11.5 percent in the first half of the year, and it now looks set in 2007 to post double-digit growth for the fifth consecutive year.

The key factor underlying the rapid rise in inflation in recent months is a spike in the price of food, which makes up about 30 percent of a typical consumer basket in China, according to the economists.

The situation is less dramatic if focusing on core inflation, which does not include products prone to relatively large price fluctuations, which means not just food but also energy.

"It's really only food prices that have risen," said Mo Qian, an analyst with Essence Securities in Beijing.

"If we look at core inflation, it's basically stable, and may actually even have fallen," she said.

Even so, observers said the Chinese government, which is extremely sensitive to inflation trends, is likely to resort to new monetary measures in order to dampen price rises.

"Apart from another interest rate hike at the end of October, the government will consider the inflation data for the month, and may opt for one more rate hike in November," said Shenyin Wanguo's Li.

Among the reasons why China is so concerned about inflation, political concerns may be most important.

Soaring inflation helped undermine the Nationalist regime in the 1940s, pushing the Communist to power.

Again in 1989, the student protests that eventually snowballed into the regime-threatening Tiananmen demonstrations were initially triggered partly by outrage over steep price rises.

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