Despite consumer prices hitting a 10-year high, economists have
ruled out the possibility of further rapid price rises and forecast
a slowdown in two or three months.
They based their judgment on the fact that the spurt in the
consumer price index (CPI), which gained 5.6 percent in July
year-on-year, was mainly caused by short supply of food products,
especially pork.
But some warned that the growing buying power caused by rising
incomes and anticipated price increases of resources and energy are
major worries.
Lin Yueqin, a researcher with the Chinese Academy of Social
Sciences, said the government has already taken measures to
encourage farmers to raise more pigs and guarantee meat supply. "I
believe meat prices will fall in two or three months as supply
returns to normal."
The outbreak of blue ear pig disease forced farmers to slaughter
sows and piglets this year, affecting pork supply. The wholesale
price of the staple meat as a result soared 74.6 percent
year-on-year in June.
Food prices jumped 15.4 percent while non-food items rose only
0.9 percent in July. Meat and meat-related foodstuff rose 45.2
percent compared with the same period last year.
"China has the capacity to guarantee the supply of meat
products," said Lin.
CPI has risen year-on-year 5.6 percent in July, 4.4 percent in
June and 3.2 percent in the first six months.
A research team of the Development Research Center of the State
Council holds that prices of manufactures are still stable. During
the first six months, the core CPI, an internationally accepted
inflation index that excludes food and energy, rose a mere 0.9
percent, meaning inflation is still at a low level.
(China Daily August 14, 2007)
