While China's consumer goods market continued to suffer lower
prices in December, positive news came in the form of easing
deflationary pressure.
During the month, the consumer price index (CPI) - Chinese
policy-makers' key inflation gauge - dropped 0.4 percent compared
with a year ago, the National Bureau of
Statistics said yesterday.
December's CPI was an improvement on the 0.7 percent decline in
November and the 0.8 percent drop in October.
Zhang Liqun, a senior research fellow at the Development Research
Center at the State Council, said the CPI improvement was mainly
because of booming local and overseas demand, which helped balance
supply and demand.
The government's efforts to cut overproduction and increase the
capacity for new products also contributed to the improvement, he
said.
In
December, the price of grains fell 1.3 percent from a year earlier,
while vegetable prices jumped 8.1 percent and fruit prices moved up
3.3 percent, the bureau said.
The price of clothing fell 3.2 percent year-on-year while the cost
of household equipment fell 5.4 percent, it said.
The price of petrol surged 18.7 percent year-on-year and diesel
jumped 19.1 percent.
For 2002, the CPI dropped 0.8 percent, the bureau said.
Qi
Jingmei, a senior economist at the State Information Center, said
the deflationary pressure will continue to ease this year, but
consumer prices will remain at a low level.
"The CPI is likely to grow about 0.5 percent this year," she
said.
The national economy will continue to advance at a higher rate this
year, topping 8 percent in 2002, Qi said.
"This will play an active role in the CPI's growth," she said.
Meanwhile, local governments are likely to take a series of
measures to intervene in consumer prices, Qi said.
The government will also continue to increase money supply to
support economic development.
Furthermore, faster industrial production expected this year will
require a lot of energy and raw materials, which is beneficial to
CPI figures, Qi said.
She said the consumer goods market, which is expected to enjoy a
number of favorable factors such as an increase in residents'
income and a boost in consumption, will grow at a higher level.
(China Daily January 21, 2003)