Wen made the comments in a chat with Internet users as authorities braced for possible rallies in major cities after an online appeal aimed at pressing for government openness.

Wen also said the world's second-largest economy would aim for seven percent annual growth over the next five years -- a rare lowering of its usual target of eight percent expansion, until now seen as key to staving off social unrest.

And he again brushed off foreign complaints about the value of the country's currency, seen by critics in the United States and elsewhere as artificially undervalued, saying any "substantial" appreciation would hurt the economy.

"Rapid price rises have affected the lives of the people and even social stability," Wen acknowledged.

But he added: "We definitely can contain inflation."

China announced earlier this month that January inflation remained stubbornly high at 4.9 percent despite a series of measures taken to dampen price rises, including three interest rate hikes in the past four months.

The soaring price of food, housing and other essentials has become Beijing's main concern, and China's leaders have watched uneasily as those and other issues helped spark the unrest roiling the Middle East and North Africa.

The turmoil in the Arab world has inspired a mysterious online call for people to come out each Sunday for subtle "strolling" protests at designated sites in 13 cities across the country.

Calls for protests last Sunday sparked a heavy police turnout in Beijing, Shanghai and other cities. The events appeared lightly attended, however, and free of major incidents.

Security was ramped up again on Sunday, with at least 300 uniformed police guarding the entrance to the rally site in the Wangfujing shopping street in central Beijing.

At least a dozen police cars and vans, as well as armoured police vehicles, were parked nearby.

The online protest call seen on overseas Chinese-language websites -- it was blocked by censors within China -- has urged people to rally to press for government transparency and free expression.

Inflation, especially related to food, has a history of sparking unrest in China, particularly among the poorer segments of the population.

It has become a hot issue for the government as the economy has sizzled along in the wake of the global financial crisis, last year overtaking Japan as the world's number two economy after the United States.

"In the five-year plan, we have decided on an economic growth rate of seven percent," Wen said, referring to the government's economic blueprint for 2011-2015 that is to be put before China's rubber-stamp parliament in a week.

China's economy grew 10.3 percent in 2010, marking the fastest annual pace since the onset of the global crisis.

Unlike other countries struggling to spur growth, Beijing has been trying to slow its economy amid fears the economy is overheating, and stem a flood of liquidity that is fanning inflation and driving up property prices.

Addressing the value of the yuan, Wen ruled out the sort of "substantial" increase being urged in the United States, where China is accused of keeping the currency artificially low to make its exports more competitive overseas.

A sharp rise "would bankrupt or put out of business many processing enterprises, cause foreign trading companies to lose orders to other countries," and cause widespread unemployment, he said.

However, he pledged China would continue with a gradual reform of its currency policy, which has seen the yuan strengthen slightly since last year, but short of what is being demanded in the United States.

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