BEIJING: China said Thursday that consumer prices rose in February for the fourth straight month while new lending slowed sharply from a month earlier, as the government stepped up efforts to tame inflation.

The consumer price index, the main gauge of inflation, rose 2.7 percent in February compared with the same month a year earlier, the National Bureau of Statistics said.

"We believe this year's price rises will be mild and controllable so we have to stabilise inflationary expectations," bureau spokesman Sheng Laiyun told a press conference.

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

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

Last year, the holiday fell in January.

In the first two months of the year, consumer prices increased by 2.1 percent from the same period in 2009.

The Chinese government sees consumer spending as a key factor in boosting the economy as it tries to reduce its reliance on exports and investment to drive growth.

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 that 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 official Xinhua news agency

New lending reached 700.1 billion yuan (102.57 billion dollars) last month, compared with 1.39 trillion yuan in January, official data showed.

Industrial output, which shows activity in the millions of factories and workshops around the country, expanded by 20.7 percent on-year in the first two months of 2010, the statistics bureau said.

Retail sales, the main measure of consumer spending, rose by 17.9 percent on-year to 2.5 trillion yuan in the January-February period.

Fixed-asset investment in urban areas rose 26.6 percent to 1.3 trillion yuan in the first two months, compared with the same period a year earlier.