The announcement reinforces a change in direction charted this year of modest tightening after the government and banks flooded the economy with easy money to effectively ward off the global economic crisis in 2009.

The ruling Communist Party's top body, the Politburo, decided to "implement an active fiscal policy and a prudent monetary policy" in 2011, said a Cabinet statement.

Beijing raised interest rates Oct. 19, highlighting its divergence from the United States and other major economies, which are trying to boost growth. The central bank said in its latest quarterly report it would "gradually return policy to a normal position," indicating interest rates would rise.

The government is trying to cool inflation that spiked to 4.4 percent in October — well above the official 3 percent target — driven by a 10.1 percent jump in food costs.

Analysts say November inflation might rise still higher.

The country's benchmark Shanghai Composite Index ended Friday down less than 0.1 percent while the Shenzhen Composite Index for China's smaller second exchange fell 0.6 percent.

The Oct. 19 hike pushed the lending rate on a one-year loan to 5.56 percent.

Chinese regulators also have reined in credit by forcing banks to hold back more money as reserves and tighten lending standards.

Economic growth eased to 9.6 percent in the three months ending in September after hitting a post-crisis peak of 11.9 percent in the first quarter. The World Bank and private sector economists expect full-year growth of up to 10 percent.