Prices of consumer goods will continue to rise but at a slower
rate, a top official said yesterday.
"The growth momentum of overall prices will gradually ease," Zhu
Xiaoliang, deputy head of the Ministry of Commerce's department of
market operation regulation, said during an interview broadcast
live online.
He vowed the ministry will ensure adequate supplies of major
food products such as meat and vegetables, to stabilize prices
during the upcoming Spring Festival holidays.
The ministry is analyzing the price trends of about 600 consumer
goods in the first half of the year. Preliminary results show most
of them are in oversupply or at balanced supply-demand levels, Zhu
said.
However, the rising costs of labor, land and raw materials will
increase pressure on overall price levels in the first half of the
year, he said.
China has been battling fast-rising prices for the past year,
with the consumer price index (CPI), a bellwether of inflation, at
6.9 percent in November, an 11-year high.
It was the fourth consecutive month the index exceeded 6
percent.
Analysts expect CPI figures for December, due for release
tomorrow, to be about 6 percent.
"The ministry's view is in line with market trends," Zhu
Baoliang, a senior economist with the State Information Center
(SIC), said.
Hikes in food prices, which account for a third of the CPI
basket, are seen as the main contributor to the exceptional CPI
growth, he said.
"The cost of services such as electricity and property rents
also drive the index," he said.
Food prices have remained high in recent months but they will
not continue to rise at such a fast rate, he said.
"This will help stabilize overall prices."
Zhu from the Ministry of Commerce said the price of pork will
continue to rise as the cost of pig breeding remains high. Prices
of vegetables and flour have also been rising recently because
unfavorable weather conditions have hindered their transportation
and reduced the supply.
The price of cooking oil will continue to go up because of the
high cost of soybean and rising prices on the international market,
he said.
"In the coming months, domestic cooking oil prices will run at
high levels, but supply will be sufficient to meet demand," Zhu
said.
Last week, the central government launched a number of temporary
interventionist measures to control prices of several staples such
as grain and meat.
(China Daily January 23, 2008)
