Higher food prices and the increasing cost of service items
increased China's consumer prices by 1.1 percent in September
compared with last year, the National Bureau of Statistics said
yesterday.
Urban consumer prices registered a year-on-year growth of 0.9
percent, while those in rural areas rose 1.6 percent, the bureau
said.
Food prices increased year-on-year by 3.2 percent in September,
while service items rose by 2.3 percent, it said.
For the first nine months, the consumer price index (CPI),
policy-makers' key inflation gauge, rose year-on-year by 0.7
percent. Bureau Deputy Director Qiu Xiaohua said the CPI rise was
stable.
"Undoubtedly, the CPI situation has connections with the
recovery of the overall demand since the beginning of this year,"
Qiu said. "The situation also has connections with the frequent
outbreak of natural disasters such as floods and drought."
Qi Jingmei, a senior economist with the State Information
Center, said the CPI rise suggests the country's economy has turned
for the better.
"Booming local and overseas demand help balance overall supply
and demand," Qi said.
Niu Li, another senior economist with the center, said the CPI
rise was mainly because of the rapid money supply in the past few
months.
The People's Bank of China has taken a series of measures to
withdraw money from the market, but broad money supply (M2) rose
year-on-year by 20.7 percent at the end of September and narrower
money supply (M1) rose 18.5 percent.
Wang Zhao, a researcher at the Development Research Center under
the State Council, said the CPI rise was also due to higher oil
prices on the international market.
"The price rise was a piece of good news for China's economic
development, because a fall in prices would threaten corporate
earnings," Wang said.
The three economists agreed the CPI will continue to be kept in
a positive area in the coming months.
"The national economy will continue to grow at a higher rate
this year, which will play an active role in the price rise," Qi
said.
The strong growth of industrial production will continue,
because of the country's fast growing economy, the improvement of
industrial companies' economic efficiency and excellent export
prospects, she said.
"This will boost demand for energy and raw materials, which is
beneficial for price rises," she said.
But Wang said commodity prices could not grow by a large margin,
because of a number of factors.
"No China-made products falls short of supply," he said.
Also, there were no major factors which could further fuel CPI
growth, he said.
Scientific progress and the ongoing industrial restructuring
will further drag down prices, she said. The CPI is expected to
rise by 1 to 1.2 percent in 2003, Qi predicted.
(China Daily October 22, 2003)