Half of Chinese residents say consumer prices are "too high and
unacceptable", according to a new survey from the central bank.
It's the first time in three years that the majority of the
20,000 respondents from cities nationwide have deemed prices
unacceptable. Since 2004, the dominant attitude has been that
consumer prices are high but acceptable.
In the third quarter survey, 47.1 percent of respondents said
they have felt the pinch of rising prices, compared with about 24
percent the same time last year.
China's inflation rate reached 6.9 percent in November, the
highest in 11 years. Food prices, which make up a third of the
consumer basket, rose by 18.2 percent.
Nearly seven out of 10 respondents forecasted that consumer
prices will continue to rise.
Meanwhile, Chinese residents have shown an increased willingness
to save rather than invest in falling stocks and funds. About 46.3
percent of those surveyed in the third quarter said "deposit
interests" were acceptable. In the first-quarter survey just 39.6
percent demonstrated a willingness to save in banks.
When asked "What's your favorite asset to hold", only 35.8
percent of respondents in the third quarter said they opted to buy
stocks and funds, compared to 40.2 percent in the second
quarter.
Fluctuations in China's stock market, along with the central
government's efforts to increase interest rates, reserve
requirement ratios and other tightening measures, have quelled
hunger for stocks and funds.
The entrepreneurs' confidence index dropped to 76.9 percent, as
many believe the government will take further measures to curb
economic overheating. The index was about 82 percent in the second
quarter.
In the quarterly survey, about 40 percent of investors said they
believe that production material prices will increase. And about
42.9 percent said they believe raw material prices will go up and
19 percent said sales prices will rise.
About 40 percent of surveyed enterprises said they are "in good
condition" and have increased their profit-making capability.
However, 25 percent of the enterprises said the loan policy is too
strict and they have had difficulty handling capital flow due to
limited access to banking finance.
(China Daily December 21, 2007)
