More tightening moves in pipeline

The State Council, or China's Cabinet, has pledged to continue the country's prudent monetary policy to rein in soaring prices.

"Judging from the inflation situation in the first quarter, we are still under great pressure of price hikes," said Premier Wen Jiabao at an executive meeting of the cabinet on Wednesday, adding, "We should never lower our guard."

Experts said the government would introduce more tightening policies to curb rising prices as inflation remained the biggest risk in Chinese economy.

Liu Qiyuan, an analyst with the Qilu Securities, expected more tightening moves will come with interest rate hikes as early as Friday evening, or as late as the end of April.

Sun Chi, an analyst with the Nomura Securities, said inflation pressure would persist for a period of time, which indicated the monetary tightening circle was only in its early days.

"We expect interest rates will be lifted by another 75 basis points this year, and bank's reserve requirement ratio will be increased by another 100 basis points," he said.

But Sun Chi warned that the government should be cautious of anti-inflation measures as they could put a sudden brake on the fixed-asset investment and might lead to a "hard landing."