China's consumer price index (CPI), a main gauge of inflation, rose 2.1 percent year on year in March, down from a 10-month high of 3.2 percent in February, mostly attributed to dropping food prices.

Such prices, which account for nearly one third of weighing in calculating the CPI, edged up 2.7 percent year-on-year in March, much less than the 6 percent in February, said the National Bureau of Statistics (NBS).

Wang Jun, an economist with the China Center for International Economic Exchanges, said mild inflation in the first quarter laid a good foundation for achieving this year's inflation control target.

China aims to hold this year's consumer inflation to around 3.5 percent, according to the government work report released in March.

With China maintaining a prudent monetary policy this year, the country will not encounter intense inflationary pressure in the first half, Wang said.

Liu Ligang, an economist with ANZ National Bank Ltd., said the recent outbreak of the H7N9 avian influenza virus will weaken demand for meat products, which will help ease inflationary pressure in the next few months.

The CPI decline means the central bank is less likely to implement tightening policies in the next two to three months, Liu said.

"However, in the face of pressures from capital inflow and rising property prices, we believe the central bank will maintain a prudent monetary policy," said Liu.