China must raise interest rates more aggressively to stifle demand for credit that has fuelled an investment boom, an influential government economist said in remarks published on Monday.

Yi Xianrong, an economist at the Chinese Academy of Social Sciences, a top government think-tank, joined a chorus in support of raising borrowing costs to help ward off economic overheating after a slew of tightening measures in recent weeks.

"Many economic problems are a result of low interest rates and therefore raising bank lending and deposit rates would be the best method to resolve the problems," Yi was quoted as saying in a report posted on the official Web site (Chinamoney.com.cn).

"Raising bank lending and deposit rates is imperative."

In late April, the central bank raised the benchmark one-year lending rate to 5.85 percent from 5.58 percent in response to the faster-than-expected economic growth of 10.3 percent in the first quarter, but it kept bank deposit rates unchanged.

The rate rise was the first since October 2004.       

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