Analysts said the jump would not trigger a knee-jerk response from policymakers in the world's third-largest economy but the figures raised the prospect of more drastic tightening measures later in the year.

The consumer price index, the main gauge of inflation, rose 2.7 percent year on year in February, the National Bureau of Statistics (NBS) said.

Officials insisted the increase was manageable and in line with the three percent target for 2010 put forward by Premier Wen Jiabao last week in his opening speech to China's annual parliamentary session.

"We believe this year's price rises will be mild and controllable," NBS spokesman Sheng Laiyun told a news conference.

"Judging from the current situation, investment, consumption and foreign trade are better coordinated, so we don't see any signs of economic overheating."

Inflation accelerated from January, when prices rose 1.5 percent. That was partly because the Lunar New Year holiday -- when Chinese splash out on food, alcohol, cigarettes and gifts -- fell in February this year.

Last year, the holiday was in January.

Bad weather also drove up food prices, Sheng said.

Analysts agreed the inflation spike was in large part seasonal.

"We believe this is purely the Chinese New Year holiday effect -- it says nothing about rising inflationary pressure in China," Lu Ting, an economist at Bank of America-Merrill Lynch, told AFP.

"We don't believe that the PBoC (People's Bank of China) will hike rates in response. We stick to our view that interest rates will be hiked in the second half."

In the past week, senior Chinese officials have been at pains to ease fears about inflation, with the chairman of the banking regulatory commission saying it was unlikely price increases would be "more than moderate".

"Don't get into too much of a panic or be afraid about inflation," Liu Mingkang told the Xinhua news agency on Wednesday.

Royal Bank of Canada senior strategist Brian Jackson said price pressures would build, eventually requiring tougher action if Beijing wants to meet its 2010 goals.

"If Premier Wen wants to keep CPI inflation at three percent for 2010 and prevent the economy from overheating, he will probably need to use all the tools at his disposal, including higher interest rates and a stronger currency," he said.

China has taken steps to calm inflationary pressures by ordering banks to increase their capital reserves three times since December -- effectively limiting the amount of money they can lend -- amid mounting fears of bad debts.

Analysts said the measures seemed to be working, with official data showing new lending reached 700.1 billion yuan (102.57 billion dollars) last month, roughly half January's figure of 1.39 trillion yuan.

However, property prices rose 10.7 percent on-year in February -- the fastest pace in nearly two years -- complicating the task for policymakers.

"Pressures are building on multiple fronts, supporting our view that higher inflation would likely bring rate hikes later on," said Citigroup economist Shen Minggao.

Exports surged 45.7 percent on-year in February and industrial output expanded by 20.7 percent on-year in the first two months of 2010.

Retail sales, the main measure of consumer spending, rose 17.9 percent on-year, while fixed asset investment in urban areas rose 26.6 percent in January and February.

In another indicator of the country's soaring wealth, mainland China this year rose to second on the newly released Forbes rich list, with 64 billionaires.

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