China's April inflation near decade-high levels

The government also released data showing China's trade surplus fell by 1 percent in April. That could help to ease inflation by reducing the amount of money flooding into the booming economy.

April's consumer prices rose 8.5 percent compared with the same month last year, the National Statistics Bureau said. That was up from March's 8.3 percent rate and just short of February's 8.7 percent, the highest inflation in 12 years.

"It is still far too early to claim success in the battle against inflation," Goldman Sachs economists Yu Song and Hong Liang said in a report to clients.

Consumer prices have jumped since mid-2007, driven by food costs that hit 22.1 percent in April. The government has been trying to slow down the rising cost of pork, grain and other items by boosting supplies and placing a ceiling on the price of basic goods.

Meanwhile, the government ordered Chinese banks to increase the amount of money they hold in reserve, the fourth time this year, to curb lending and control inflation. The central bank raised the amount of deposits that banks must keep in reserve by 0.5 percent to 16.5 percent -the highest level to date.

Economists say Chinese bank deposits are growing so fast that the increased reserves have had no direct impact on lending, but are meant as a signal to bankers to reduce credit.

Soaring food prices are especially worrisome to Beijing because they hit China's poor the hardest.

There have been no reports of demonstrations, but inflation in the 1980s and '90s set off protests -an embarrassment that communist leaders want to avoid ahead of August's Beijing Olympics, which they hope will showcase China as a prosperous, stable society.

A senior economic official, Vice Premier Wang Qishan, said Friday that Beijing will stick to tight monetary policies to cool inflation, but announced no new initiatives.