China's stocks closed up in the morning trading session Monday despite the lingering possibility of an interest rate rise to curb inflation.

The benchmark Shanghai Composite Index up 1.15 percent to 2,873.84. The Shenzhen Component Index closed at 12,661.96, up 1.62 percent, at midday.

China's inflation picked up to a 28-month high of 5.1 percent in November, as bank lending looked certain to exceed the 7.5-trillion-yuan full-year target the government set at the start of the year.

To curb inflation and soak up excessive liquidity, the country's central bank has raised banks' reserve requirement ratio six times this year. It also lifted the benchmark lending and deposit rates on Oct. 20, the first such move in nearly three years.

China will enhance and improve macro-economic regulation to ensure stable and healthy economic development next year, said a statement released Sunday after the annual Central Economic Work Conference.

The country's economy grew 9.6 percent year on year in the third quarter this year, slowing from the 10.3-percent increase in the second quarter and 11.9-percent surge in the first quarter.