US easing spurs inflation fears

As US Federal Reserve chairman Ben Bernanke suggested further monetary easing was on the way, economists warned that this could lead to higher inflation and dilute the value of China's foreign currency assets.

The warning came as China's monetary authorities are taking steps to prevent an asset bubble as economic growth picks up speed.

Bernanke told the Senate Banking Committee on Tuesday that the Fed initiative in bond purchases is creating a stronger recovery at home and "mutually beneficial" results for other countries.