monetary policy

The
Bank of England recently released a paper examining the effect trade
with
China has had on UK inflation which draws important conclusions on
regional
wage inflation in China and how increasing trade with China affects
Western inflation in general.  Also of note are two further papers, one
examining the effect on the US economy (written in 2004) and one more
general paper looking at the effects on OECD countries (2008).
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Inflation in China hit 8.7% in February, a 12-year high. The National Bureau of Statistics said the strong price growth - up from 7.1% in January - was largely due to the fierce winter weather and seasonal price rises over the Chinese New Year holiday.

Chinese New Year, being a holiday, is a time when bank counters and ATMs are stuffed full of cash, because people want to spend money.
The amount of money in circulation may be treated as a measure of inflation, since the supply of goods is limited and monetary statistics are more easily counted and come out a few weeks before peliminary inflation numbers.  Such interpretation of money is not to be judged lightly, the numbers should be looked at far less than the stry they tell.
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China does not have an open, freely traded currency. How foreign
exchange transactions are carried out is an important part of
understanding how current Chinese monetary finds itself constrained.
Perhaps the easiest way to understand the process would be via an
example. In this example, it's important to remember that assets and
liabilities will always balance (take capital, the third balance sheet
item, as a liability to keep things simple, indeed, that's how many
Central Banks treat it).
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The PBoC is widely documented to have a lot of US Dollar-denominated assets. According to Brad Setser on RGE Monitor they're growing by $500bn per year, and I'd be inclined to agree with his analysis of all the 'extras' aside from the $262bn trade surplus (a brief basic summary of how a trade surplus results in USD holdings is here).
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Xinhua have released a timely timeline showing price control measures, mainly for agricultural products, instigated in 2007 and 2008, as news of further controls on agriculutral product prices were reported (itself following the news that energy price rises would be frozen.
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