The inflation rate in China is still the country’s main economic worry. But don’t expect much in the way of monetary policy from China to curb inflation, according to a report by Thomson Reuters.

Although inflation is skirting a 12-year high, it has been in the mid-8 percent range for a few months, and Beijing thinks salvation may be at hand with food prices on the wane.

Officials are also wary of an overly aggressive drive against inflation that would pile misery on manufacturers, already grappling with the global slowdown and rising commodity costs.

In other words, a potential drop in growth may weigh more heavily on Chinese leaders’ minds than inflation at its current level, stubbornly high as it is.

“Even though Chinese monetary policy has tightened significantly over the past 12 months, don’t forget the economy is still growing at a double-digit rate,” says Keith Fitz-Gerald in Money Morning, “and will continue to operate at that pace for decades to come. At the same time, remove fast-escalating food prices from this equation, and China’s non-food Consumer Price Index (CPI) has nudged up less than 1%, which is hardly a blip on the radar.

“As for the notion of a US-led recession causing China’s economy to crater, well, we just can’t see that happening. Not only has China successfully diversified its own export markets so that it is less dependent on the United States, it also has taken steps to create domestic demand for China-made products so that it’s not solely dependent on Western buyers to be prosperous.”

“China is not exactly yesterday’s news,” says Manraaj Singh in Profit Watch, “this growth story still has a long way to go.

“But production costs in the country are soaring and low-end producers are feeling the pain. China just isn’t ‘China’ anymore. And that’s pushing economic growth into a lot of new areas.”