Wang expected the central bank to continue to raise the reserve requirement ratio in the first half, and to raise the benchmark interest rate by 75 percentage points in total in three moves during the year.

Money Supply

China's broad money supply (M2), which covers cash in circulation and all deposits, increased 17.2 percent year on year to 73.56 trillion yuan ($11.2 trillion) as of the end of January, 8.9 percentage points lower than the same period last year, said the People's Bank of China.

Shedding U.S. Assets

The U.S. Treasury Department said China trimmed its holdings of U.S. Treasury securities last December for the second consecutive month by $4 billion, or 0.4 percent of its total holdings. China still holds $891.6 billion in U.S. Treasury securities. The net reduction in 2010 amounted to $3.2 billion.

China remains the largest foreign holder of U.S. Treasury securities, ahead of Japan, which increased its holdings by $6.4 billion in December to $883.6 billion. Total holdings of Treasury securities by all foreign countries amounted to $4.37 trillion at the end of December 2010.

Total foreign purchases of Treasury notes and bonds were $54.6 billion in December, compared with $61.7 billion in November. The securities are key to funding the massive U.S. budget deficit that reached a dizzying $1.29 trillion in the 2010 fiscal year ending September 30, 2010.

Economists believe prospects for accelerated U.S. economic growth, propelled by Federal Reserve's purchases of treasuries, are drawing in overseas investors, along with concerns about the creditworthiness of debt-stricken European nations.

Dairy Boom

The dairy industry is regaining strength, though concerns linger.

Profits for the dairy sector jumped 35.8 percent over the previous year to reach 2.95 billion yuan ($448.3 million) in the fourth quarter of 2010, said a report by the China Economic Monitoring Center of the NBS. Sales reached 52.5 billion yuan ($8 billion), an increase of 20 percent year on year.

The magnitude of the bounce-back was a reason to celebrate, given how much the tainted formula scandal affected consumer confidence. On top of the reputation crisis came the global financial meltdown that rippled through China's economy.

Policymakers have spared no effort to revitalize the sector. The General Administration of Quality Supervision, Inspection and Quarantine announced in November 2010 that all dairy firms must apply for new production certificates in 2011 and those with weak quality guarantees will be shut down.

"Industry profitability has recovered to the highest level since 2008," said the report. "The momentum will continue into this year, but growth may slow down because of a relatively high comparison base."

But one cause for concern was exports, which nosedived 19.6 percent year on year in the fourth quarter of 2010. "It seems that the industry still has a long way to go before moving out of the shadow of the health scare in 2008," said Song Kungang, President of the China Dairy Industry Association.

In addition, cost inflation is also threatening to eat into profits, he said.

Credit Card Fever

By the end of 2010, Chinese banks had extended a total credit card debt of 2 trillion yuan ($304 billion), compared with 1.3625 trillion yuan ($207.1 billion) at the end of 2009, said the central bank.

This should be good news for the country, which is pinning its hopes on the consumer market to help lessen its reliance on exports and investment as a source of growth.

Moreover, concerns over the risk of bad debt began to abate. Credit card debt overdue at least six months was 7.689 billion yuan ($1.2 billion) in 2010, a decline of 0.1 percent from the previous year, said the central bank.

MasterCard, the world's second largest payment network, expects China to overtake the United States as the biggest credit card market globally by 2020, with 800 million to 900 million credit cards in circulation.

Accelerating urbanization and a wealth boom are enabling Chinese consumers to buy more on credit, it said.