China's inflation rate slowed to 2.6 percent in 2012, the National Bureau of Statistics said Friday, down sharply from 5.4 percent the year before.
The annual inflation figure was also lower than the government's target of 4.0 percent, signalling that prices remained well under control last year.
Inflation stood at 2.5 percent year-on-year in December, the statistics bureau said, compared with 2.0 percent in November.
Rising food prices, particularly for vegetables, were the major contributor to the December increase, the bureau said.
The benign inflation environment came as China's economic expansion continued to slow during the first nine months of the year, with GDP growth of 7.4 percent in the three months to the end of September -- the worst in more than three years.
But data for the final three months of the year, including manufacturing, broader industrial output and retail sales, have spurred optimism among economists that growth accelerated in the fourth quarter.
China releases fourth-quarter GDP figures next Friday.