China's inflation jumps to 8.7 pct.

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The figure exceeded forecasts and raised the likelihood of interest rate hikes or other emergency steps by Chinese leaders, who worry about a possible political backlash if soaring prices erode rising living standards.

The increase in the consumer price index was up from January's 7.1 inflation rate, driven by a 23.3 percent rise in food prices from the same month last year, the National Statistics Bureau reported. Economists had expected a February rate close to 8 percent.

"China will find it difficult to meet the target inflation rate of 4.8 percent for the full year," Jing Ulrich, JP Morgan's chairwoman of China equities, said in a report to clients.

Economists say inflation should rise further in March before it peaks and begins to fall in coming months.

Beijing has raised interest rates repeatedly and is trying to boost food production to ease inflation pressure amid a boom that saw economic growth rise to 11.4 percent last year.

Those efforts were derailed when the worst snowstorms to hit China in five decades blanketed the south in January and early February. The storms wrecked crops, killed farm animals and paralyzed shipping. Shortages of meat and vegetables caused prices to soar in snow-hit areas.

Prices began to climb in mid-2007 due mostly to shortages of pork, China's staple meat, and grain. But government data also show pressure for across-the-board price rises is increasing as factories and households compete for resources.

Pork prices shot up 63.4 percent in February compared with the year-earlier period, while fresh vegetables were up 46 percent and cooking oil 41 percent, according to the statistics bureau.

Chinese leaders worry about the political impact in a society where families spend up to half their incomes on food and the government has pledged to look after the urban and rural poor. Bouts of high inflation in the 1980s and '90s sparked protests, a scenario that Chinese leaders want to avoid, especially as the country comes under intense foreign scrutiny ahead of this summer's Beijing Olympics.

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