China's inflation rate rose to 5.5. percent in May, its highest level in nearly three years despite government efforts to slow the fast-growing economy.

Last month's inflation rate edged above the 5.3 percent rate posted in April, driven by rising food prices brought on by crippling drought conditions in some parts of China. Beijing has set an annual inflation target of four percent, a level it feels will ward off social unrest.

In response, China's central bank moved Tuesday to raise the ratio of funds banks must set aside as reserves by half a percentage point, in its sixth attempt this year to contain rising prices. The latest increase, to a record 21.5 percent of deposits, is to take effect next week (June 20).

The Chinese government is reversing steps it took to boost the economy as the global slowdown took hold in 2009, including a $586 billion economic stimulus package and a record surge in lending.

Meanwhile, the National Statistics Bureau says industrial output rose 13.3 percent in May from a year earlier, while fixed-asset investment for the first five months of 2011 rose 25.8 percent from the same period in 2010.

Retail sales rose 16.9 percent in May from a year earlier.