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While the 3.1 percent jump in consumer prices is evidence of continued growth – it was partially responsible for last week's global stock market rally – it also raised concerns of inflation and overheating.

Chinese officials, aware of their dilemma, are treading a delicate line between maintaining strong economic growth and managing the risks of overheating.

The global economy is still rather fragile as May's U.S. employment and consumer data calls into question the extent of the U.S. economic recovery and the outlook for Europe is even more gloomy because of proposed government spending cuts.

This fragility amplifies the consequences of any sharp slowdown in China's economic growth, including the remote risks of a global double-dip recession.

Jay Suskind, senior vice president at Duncan-Williams Inc., also said that for booming economies, it is important to avoid overly harsh measures and “engineer a soft landing” to minimize disruptions and the risk of a crash.

However, doing too little to curb inflation and overheating will also have serious consequences for the economy of China and the world.

The more an economy overheats – both in duration and degree – the harder it will be to engineer a soft landing.

Given China's huge appetite for raw materials, an overheating Chinese economy will also drive up commodity prices, which both causes disruptions in the market and makes needed raw materials unnecessarily expensive, thereby curbing worldwide economic growth.

Suskind sees China's economy growing for years -- if not decades -- to come and believes that the Chinese political leadership understands the importance of maintaining a reasonable pace of economic growth and avoiding excessive booms and busts.

Suskind also added that although overheating concerns have mostly focused on the real estate market and the financial system, the recent wage increases present a new and interesting dynamic to this issue.

Commenting on China's ability to balance between economic growth and overheating concerns, Hank Smith, chief investment officer at Haverford Trust Co. in Radnor, Pa. said that “China's record so far in managing its economy has been pretty good, so you have to give them some credit.”