China’s surprise Christmas interest-rate hike could signal Beijing has lost faith in other measures to rein in the rapid credit growth fueling housing and food inflation, according to one analyst. Efforts to cool the pace of credit expansion through higher reserve requirement ratios, bank-lending targets, lending restrictions and other methods are losing traction, Royal Bank of Canada strategist Brian Jackson said in a note following the People’s Bank of China rate-hike announcement Saturday. “Officials will need to put more emphasis on adjusting the price of credit — that is, interest rates — to keep policy at appropriate settings,” Jackson said in the note. “The Christmas Day move suggests that Beijing is coming around to this view.” Jackson said overall credit conditions are little changed from 2009 levels, when the government encouraging rather than restricting credit, in an effort to support the economy in the wake of the financial crisis. But China’s increasingly sophisticated financial system is finding ways around administrative controls, with lending taking place via trust companies or gray accounting that disguises lending from official figures, Jackson said. “The sharp increase in inflation over the last six months also shows that Beijing’s efforts to slow down the economy this year have had only a limited impact,” Jackson said. The central bank on Saturday lifted its key lending and deposit rates by a quarter point each, its second such move in 10 weeks. The hike, effective Sunday, brought the one-year lending rate to 5.81% and the one deposit rate to 2.75%.