Food costs push China inflation to 3.1 percent

BEIJING (AP) Higher food prices pushed up China's consumer inflation in September as the government tried to keep to keep an economic recovery on track.

Consumer prices rose 3.1 percent over a year earlier, government data showed Monday. That was up from August's 2.6 percent but below the Communist Party's 3.5 percent target for the year.

Persistently higher inflation could complicate efforts to keep China's economic recovery on track by limiting the government's ability to prop up growth with lower interest rates or stimulus spending.

The country's top economic official, Premier Li Keqiang, earlier said Beijing would try to keep economic growth above 7.5 percent for the year.

"Inflation remains at benign levels in the near term," said JP Morgan economist Haibin Zhu in a report. "The relatively benign inflation dynamics suggest that stabilizing growth and economic reform remain the priority issues for policymakers in the near term."

Companies and investors are looking to a November ruling party meeting at which leaders are expected to produce a blueprint for future economic reforms.

Li and other leaders have promised changes in China's financial system and more opportunities for entrepreneurs but have yet to release details.

The September price rise was driven by an 18.9 percent jump in the cost of fresh vegetables. Holidays, drought and floods were partly responsible for the increase.

Prices of non-food products rose 1.6 percent.

The inflation figures come after China's exports unexpectedly dropped in September while imports rose.

Producer prices, which measure the cost of goods as they leave the factory, fell 1.3 percent, suggesting weak demand.