Call it the surprise that wasn’t very surprising.

Before today’s release of consumer price inflation data for January in China, economists surveyed by Bloomberg had projected a 5.4% annual inflation rate. That would have been a big increase from the 4.6% annual inflation rate in December and topped the 5.2% rate in November.

In the event the data today, February 15, showed a 4.9% annual rate of increase in January.

After rallying strongly on the initial release on headlines that said, “Inflation in China less than projected,” stocks in Shanghai finished unchanged for the day and Hong Kong’s Hang Seng dropped almost 1%.

Why didn’t the initial move higher hold? Because the surprise was no surprise. Traders in China had widely anticipated that inflation would come in at less than 5% because this January was time not just for the usual annual tweaking to China’s inflation numbers but for the five-year major overhaul of how inflation is calculated by Beijing. The consensus was that this overhaul would include a major reduction in the weighting for food prices, which had made up a third of the inflation index. With food inflation running at a more than 11% annual rate, reducing the weighting for food prices would have the effect of reducing the overall inflation rate.

Which is exactly what happened. And no one was surprised—except perhaps those economists surveyed by Bloomberg. (But we should cut the economists some slack: The People’s Bank had signaled that the inflation numbers would be ugly by raising its benchmark interest rate last week.)

At 4.9%, adjustments or no adjustments, the inflation news wasn’t good. This is the fourth straight month that inflation exceeded the government’s target—even though Beijing has raised that target to 4% for 2011.

Food prices climbed at a 10.3% annual rate in January. Vegetable prices were up 2%, grain prices were up 15%, and fruit prices were up 35%. Non-food prices rose at a 2.6% rate, the fastest pace in the last six years.

Below the headline numbers the data was a mixed bag showing inflation pressures building up in the pipeline but with the beginnings of slowing in the economy, perhaps, in reaction to the People’s Bank’s moves to raise interest rates (three times since October) and to increase bank reserve requirements.

Producer prices climbed at a 6.6% annual rate in January. That was the fastest rate of increase in eight months and shows that higher prices continue to build up at the factory level that will gradually move through to the consumer level.

New bank loans more than doubled in January from December—but then they always do as banks rush to get loans out the door before the government can impose tighter quotas (and before lending runs up against the quota ceiling as it does at the end of every year.) But the level of new lending may actually be slowing if you compare January to January. January 2011 new loans were 160 billion less than the consensus projection in a Bloomberg survey.

M2, the widest measure of money supply, also showed some improvement by climbing at “just” a 17.2% rate. That was down from a 19.7% increase in the money supply in December. The People’ Bank has set an M2 target for 2011 at a very generous 16%. (If this is “tightening,” it’s tightening designed not to slow the economy by very much.)

As the markets recognized by pulling back from their early rally, there’s nothing in these numbers to suggest that the People’s Bank will decide to stop raising interest rates. My own best guess would be one more increase relatively soon and then a pause to see how the economy is reacting and how the wheat and vegetable harvests are shaping up.