“While the factors driving the prices stay up, will remain significant pressures on inflation,” China said in a report submitted to the World Trade Organization.

The document, which is part of a regular review of trade policy of China to the WTO, was released today but dated May 7 five days before the Beijing issued that inflation accelerated to 8.5% in April near its highest level in 12 years.

The Chinese premier, Wen Jiabao, said that inflation is still the most complex economic problem for his country, even when the earthquake that devastated the city of Sichuan last week has created new economic uncertainties.

The report to the WTO reaffirms Beijing to balance its economy a boost to consumer demand, rather than simply rest on investment and exports as engines of growth.

China noted that its currency, the yuan, had appreciated 13.3% against the dollar between July 2005 and late 2007. The pace of the currency rises accelerated this year, he said.

However, the document gave no signal on the future exchange rate policy. Critics of China in the United States and Europe say Beijing keeps artificially low value of the yuan to give an advantage to its exports in international markets.

The WTO has said that China would benefit by having a more flexible exchange rate, as this would allow you to fight inflation more effectively.

“A more flexible exchange rate could enable China to operate a more independent monetary policy, which would be adequate to ensure low inflation and stable”