BEIJING -- The price of corporate goods hit a record high for the year in July, testifying to growing inflationary pressures in China.

The People's Bank of China has warned of the risk of inflation in its quarterly report on monetary policy.

According to data released by the central bank on Monday, China's corporate goods price indices (CGPI) were up 2.5 percent on last July, setting a new high for the year.

This followed a year-on-year rise of 2.3 percent in June, which also broke previous records.

The CGPI reflects price changes of products traded by corporations, and traces overall price fluctuations together with the consumer price index (CPI).

The rise coincided with a record growth of producer prices indices (PPI) in July, which rose 3.6 percent on the same period last year.

The central bank attributed the price hikes to the rapid growth of investments and exports, which have maintained a buoyant demand for production resources.

Cost rises due to stricter requirements for environmental protection, labor insurance and work safety will also push up prices, according to the central bank's analysis.

Both the CGPI and the PPI have hit record highs this year, signaling inflationary pressure, said analysts.

However, CPI growth slowed in July. It was 1.0 percent up on July 2005 but 0.5 percentage points lower than June, ending the upward trend that has prevailed since March.

Slower CPI growth was mainly caused by an easing in food prices in July, said Li Huiyong, a macro-economist with Shenyin & Wanguo Securities Co. Ltd.

Statistics from the National Bureau of Statistics show that food prices in July rose 0.6 percent on the same month of last year, 1.5 percent down on the previous month.

A delayed knock-on effect in translating raw materials, fuel and power price rises into consumer goods prices is another factor restraining the CPI, said analysts.