While downstream price pressures are clearly building, Li suggests that based on historic evidence, the pass-through to consumer prices is usually limited in scale, something he believes will allow China's central bank, the PBOC, to focus on other more pressing issues for the Chinese economy in the year ahead.
However, China's producer prices rose for the fourth consecutive month in December from a year earlier.
The ongoing rebound in producer prices could help boost China's nominal GDP growth this year, Nomura said in a note, though real growth "still faces plenty of headwinds".
The yuan weakened 6.5 percent against the dollar previous year, its worst performance since 1994.
The consumer price index (CPI), a key gauge of retail inflation, rose 2.1 percent year-on-year last month, slightly below expectations.
CES 2017: Nasa's helping Nissan make driverless cars
It will be equipped with ProPILOT technology that will be mostly be useful for single-lane highway use. Nissan's autonomous vehicle drive has gained significant momentum at the CES show in Las Vegas .
For the first time in almost five years, economists at HSBC have raised their forecast for global growth and inflation over the next two years based on robust manufacturing activity, a resilient China and above all the fiscal boost expected to come in the United States under incoming President Donald Trump.
The Chinese 10-year bond yields dropped to lowest in two weeks Tuesday after latest data showed that the country's April consumer-inflation rate came in below market expectations.
The index increased 1.6 percent m/m in December, compared to 1.5 percent in November. On a monthly basis, CPI inflation rose 0.2 percent, up from 0.1 percent in the month earlier.
The pick-up in inflation will mainly be driven by movements in commodity prices and is unlikely to be sustained, the economist added.