Fan Gang also noted that overcapacity in the manufacturing industry is not conducive to inflation.

China's inflation rate quickened to a 22-month high of 3.5 percent in August from a year earlier. It was the second consecutive month the CPI has exceeded the government's full-year target of 3 percent.

Largely on the back of rising food prices, China's July CPI rose 3.3 percent from a year earlier.

China has targeted a 3 percent rise in consumer prices this year, Premier Wen Jiabao said when delivering a government work report at the annual session of the National People's Congress (NPC), China's parliament, in March.

The target takes into account the carry-over effects of last year's price changes, price fluctuations of major international commodities, hefty increases in domestic money and credit supply, and consumers' ability to bear price increases, Wen said.

China aims to strike a balance between maintaining steady and rapid economic growth while restructuring its economy and managing inflation expectations.