China's inflation leaps to 11-year high

China's consumer price inflation jumped in February to an 11-year high of 8.7 percent, presenting Beijing's stability-conscious leaders with a big economic headache in the run-up to the Olympic Games. Inflation in January was 7.1 percent and economists had expected a February figure of 8.0 percent.
"There's growing concern that China's inflation is getting out of control," said Li Huiyong, an analyst at Shenyin & Wanguo Securities in Shanghai. The Shanghai stock market fell in response to the report as investors priced in higher interest rates. The main index ended the morning session down 0.67 percent.
"This means further monetary tightening ahead," said Gao Lingzhi, a strategist at Great Wall Securities in Shenzhen. "I think the government may raise interest rates further and accelerate yuan appreciation, which would hurt Chinese manufacturers," he said.