The Economist on China's inflationary issues:
[F]ears of social unrest have made inflation one of the government's top concerns and has led it to impose various price controls over the past week. The accumulation of vast foreign-exchange reserves has fuelled domestic money growth and the inflation rate has tripled in the past year. But that rise is almost entirely due to a jump in food prices, particularly of pork. Core inflation is running at only 1.4 percent. What's more, China's monetary conditions are tightening fast. Nor is China's deflationary effect on global tradable-goods prices about to end. Chinese wages are accelerating, but productivity is growing faster. That means overall unit costs are still falling. Prices of American imports from China are rising after several years of decline. But that has more to do with the weakness of the dollar. And even if the prices of Chinese goods rise, they could still dampen inflation in richer economies, because they are much cheaper than domestically produced equivalents and are gaining market share. As China produces higher value items, it will push down prices of domestically produced goods in ever more industries.
That is, if Beijing can control inflation and the social turbulence that may result from it. And historically, price controls and crushing dissent haven't been the most effective tools in combating either problem.