Chinese leaders celebrated the Year of the Rabbit with visits to the drought-stricken north while ordinary citizens rocked city streets with cacophonous fireworks.

Worry about inflation and over-valued property markets did not dampen Beijing residents' enthusiasm for the ultimate in conspicuous consumption -- fireworks that light up the sky and are gone in a puff.

We spent over 20,000 yuan on fireworks and we have been setting them off for an hour and a half. We've only got one left, said 28-year-old massage parlour worker Li Yuanpeng, who gathered with friends in central Beijing.

I hope that business will be great and that every employee will have good luck and make a lot of money.

More than 900,000 boxes of fireworks were sold in Beijing even before New Year's Eve, when Chinese gather to eat traditional food with their families before greeting midnight with fireworks that arc high into the sky.

Wayward fireworks caused at least one conflagration -- an apartment complex and the five-star Dynasty Wanxin hotel in the northeastern city of Shenyang, which was gutted shortly after midnight.

No-one was hurt, but the nearby Sheraton Lido hotel was evacuated as firefighters attempted to battle the blaze with hoses that fell far short of the building's upper stories.

Two years ago, a brand-new building belonging to China Central Television in Beijing was destroyed by fireworks so powerful they were illegal.


Premier Wen Jiabao visited a drought-stricken region of northern China's Shandong Province, near the hometown of Chinese philosopher Confucius whose ideas are garnering renewed interest from the ruling Communist Party.

Top leaders traditionally highlight an area of policy concern with their New Year's visits. Chinese president Hu Jintao also visited dry fields in northern Hebei province, drawing attention to a drought in the grain-rich plains of the north.

Drought affects the grain harvest, which is closely connected to grain security and farmers' incomes. I cannot set my mind at ease, Wen said to farmers in Jintun village, near the city of Jiaxiang, before inspecting a reservoir.

The top priority for our economy this year is to stabilise prices. And grain is the base to realise this goal.

In a speech carried on state media on Wednesday, Wen vowed to fight inflation and property speculation.

Wheat-growing areas in central and northern China have not seen rain for more than 100 days, raising fears of damage to the winter wheat crop.

Hu, who also heads the Communist Party and military, spent New Year's eve with a garrison near the city of Baoding. Hu is expected to begin transferring his titles for a leadership succession in 2012, but may hope to retain influence through the military and other allies after the baton is passed.