"Recent prices have risen fairly quickly and inflation expectations have increased," Wen said in his "state of the nation" address.

"This problem concerns the people's well-being, bears on overall interests and affects social stability. We must therefore make it our top priority in macroeconomic control to keep overall price levels stable." Urban fixed asset investment, a measure of government spending on infrastructure, rose 24.9 percent in the January-February period, as compared with a year ago. Retail sales rose 15.8 percent in the two-month period.