Chinese shares closed slightly lower midday Wednesday as the latest interest rates increase refreshed investors' concerns over inflation.

The benchmark Shanghai Composite Index dipped 0.03 percent to close at2,798.22.

The Shenzhen Component Index dropped 0.12 percent to 11,977.18.

The People's Bank of China (PBOC), the central bank, announced Tuesday it would raise benchmark one-year borrowing and lending rates by 25 basis points from Wednesday.

The rate hikes come amid increasing pressure on the Chinese government to control inflation.