China's annual inflation rate hit 4.5 percent in January, which is the highest level in three months, according to the official data released Thursday.
The inflation rate in December was 4.1 percent.
The New Year holiday, between January 22 and January 28 this year, may have boosted prices and retail sales. It acted to decrease trade and industrial production as factories closed down for the celebration.
Food prices jumped 10.5 percent, accelerating sharply from December's 9.1 percent rise. The food price rise was driven by a 25 percent gain in the cost of the pork, which is the staple meat in China. In December, pork prices rose 21.3 percent.
The producer price index, which measures the cost of goods at the farm and factory gate, rose 0.7 percent in January compared with 1.7 percent in December.
The continuing crisis in Europe and weakness in the U.S. are hurting demands for Chinese exports, which form the key driver of the country's economy. Earlier, the International Monetary Fund had warned that an escalation of Europe's debt crisis could reduce by half China's economic growth for this year.