Price rise in China highest in seven years

The National Development and Reform Commission said Monday that domestic consumer prices are expected to rise by about 4 percent this year, which would be the highest in seven years since 1997. The commission believes that foodstuff prices spearheaded by grains are the main factors contributing to the hike of domestic consumer prices.

From January to October overall level of domestic consumer prices increased by 4.1 percent while that of capital goods in circulation grew by 14 percent, a year-on-year increase of 3.3 percentage points and 6.5 percentage points respectively.

The commission believes that the price hike since this year is a reflection of the fact that the Chinese economy has entered a new cycle of growth as well as the result of the combined effect of fluctuation in grain supply-demand relationship, investment overgrowth in certain industries and regions and price rise in the international market. However, foodstuff prices represented by grains are the main factors pushing up domestic consumer prices.

After considering various factors, the commission said, domestic consumer price hike is expected to fall back gradually in the forth quarter. The reasons are threefold. First prices of grains and main non-staple foodstuffs such as meat, fowl, egg and milk are growing stable. Second no drastic changes have taken place in the supply-demand situations of most goods prices. Third the lagging effect of last year's hike would gradually disappear.

Compared with the same period in last year domestic consumer prices in October grew by 4.3 percent, 0.9 percentage points lower than in September while month-on-month growth was zero. The Commission believes that the perceivable fallback of price hike indicates that economic operation is toward a direction anticipated by the governmental macro-control. The unsound and unstable factors in the operation of economy have been preliminarily checked.

By People's Daily Online