Balancing act needed on inflation

While latest economic figures are pointing to a slowdown, growing "external uncertainties" have prompted the country's policymakers to take a more cautious approach in their battle against inflation, officials and analysts said yesterday.

"Now, we not only have to prevent a sharp downturn of the economy, but also a rebound in investment," said Li Xiaochao, spokesperson for the National Bureau of Statistics.

Over the past half a year, policymakers have named inflation and overheating as their top concern, using tightening measures to cool the economy and curb inflation. But with the outbreak of the subprime crisis in the United States, an increasing number of analysts are sounding warning bells for a sudden economic downturn, largely due to weak export demand in the US.