Moderating food prices, as well as a high base in the year-earlier period, contributed to the slowdown in inflation, economists said.
Food prices rose 9.6% from a year earlier in December, down from the 11.7% increase in November. Non-food prices also picked up, rising 2.1% in December, compared with November's 1.9% rise.
The CPI rose 3.3% in 2010, compared with a 0.7% fall in 2009, according to the National Bureau of Statistics. The 2010 figure was above the government's annual target of around 3%.
The producer price index, a forward indicator of inflation, rose 5.9% in December, down from November's 6.1% rise. Economists had expected a 5.5% rise. The PPI rose 5.5% in 2010.