China's central bank warns of inflation

Although prices are relatively stable now, uncertainties are building up, the PBOC warned in the report.

As China's working-age population grows slower, prices of labor-intensive farm produce and services will trend up, it said.

Meanwhile, the ultra-loose global monetary supply will last for quite a long period, making it necessary to look out for potential imported inflation, according to the report.

The central bank reiterated that it will continue to implement a prudent monetary policy and make it more forward-looking, targeted and flexible.

It pledged to maintain a reasonable level of market liquidity and keep credit and social financing growing steadily and properly.

Credit support will be strengthened for key national projects, the rural sector, small enterprises, modern services and emerging industries, the PBOC said.

Speculation and investment demand in real estate will continue to be curbed, according to the central bank.

It noted that China's economy will hopefully maintain steady and relatively fast growth.

"The momentum of sustained growth remains strong and positive factors that can drive domestic demand up are increasing," it said.

However, the report stressed that the sluggish recovery of the global economy, the negative effects of monetary loosening abroad and the unbalanced economic structure domestically still present a complicated environment for China.

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