China reports a 34-month high inflation

Inflation in China increased in May to reach a 34-month high of 5.5 percent which spurs the government to tighten its monetary policy as the economic growth is slowing down. It is now a top priority for Beijing to taken control of the inflation.

The conclusion of the economist who analyzed Tuesday data says the world's second-biggest economy is slowing down, but not too quickly.

Chinese reports revealed that producer prices rose by 6.8% in May from a year earlier. That adds to the case for further tightening measures, said George Worthington, an economist at IFR Markets, a unit of Thomson Reuters.

China's central bank has already raised banks' required reserves eight times and lifted interest rates four times since October to quell inflation. The one-year lending rate is 6.31 percent and one-year deposit rate is 3.25 percent.

"Inflation pressures remain large," Sheng Laiyun, a spokesman for China's National Bureau of Statistics told a news conference.

Inflation in May compared with expectations for 5.4 percent and showed a pick up from a rate of 5.3 percent in April.