Inflation reduction top priority

Li's comments come just a day after Premier Wen Jiabao said he expects price pressures to decline steadily even as the country keeps up its brisk economic growth.

Speaking at conference, Li said while the world's second biggest economy was maintaining a rapid expansion rate, it was also facing inflationary pressures.

"China has to maintain stabilising prices as a top priority," he said, adding that controlling "unreasonable demand" for natural resources is another priority.

In an opinion piece published in Friday's edition of the Financial Times newspaper, Wen wrote he was "confident price rises will be firmly under control this year", and that China is "fully capable of sustaining steady and fast economic growth".

Wen's latest remarks were a marked shift from his comments in March when he warned about rising price expectations, and likened inflation to a tiger that is hard to cage once it is let out.

China's inflation ran at a 34-month high of 5.5 percent in the year to May, and is expected to quicken to 6 percent in June or July, which would be well above China's 2011 inflation target of 4 percent.

Shares in Hong Kong and Shanghai bounced on Friday after Wen's remarks on inflation. China shares have been among the worst performers in Asia this year on persistent worries of further policy tightening to combat price pressures.

Copyright Reuters, 2011