Zhou Xiaochuan, Governor of the People's Bank of China (PBOC), laughs as he speaks at the 2009 China Finance Forum in Beijing December 22, 2009. Zhou said that China's monetary policy needs to pursue multiple objectives, not just to fight inflation, adding that the PBOC takes China's balance of international payments into account when setting its monetary policy to support energy, housing and resources pricing reform. [Agencies]

BEIJING: China's central planners won last year's race, rushing to shore up growth before collapsing exports dragged down the economy.

They have adopted less urgency in their approach to this year's race: taming inflation before it takes off on the back of super-charged growth.

Beijing has started to trim back ultra-loose policies adopted at the height of the global financial crisis in late 2008. But these have been tentative steps, marginally in the direction of tightening, and pressure is building for more decisive action.

Policymakers and investors who ignore the warnings about inflation would be doing so at their own peril. After all, a jump in Chinese PMIs in early 2009 was one of the best leading indicators of the country's ultimately stunning recovery.

"We are probably at a tipping point when news of very strong growth is not necessarily welcomed anymore as inflationary pressures are clearly rising quickly," Yu Song, an economist with Goldman Sachs in Hong Kong, said.

Consumer prices in November rose 0.6 percent from a year earlier after falling for most of 2009.

The question is whether inflation will start to moderate around the middle of 2010 - the baseline forecast of many analysts - or turn into more of a headache.

Economists at Morgan Stanley, for example, forecast that annual consumer price inflation will crest at 3.6 percent at the end of the second quarter before falling to an average of 2.1 percent in the fourth quarter.