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China's consumer price index (CPI), rose by 6.5 percent in October compared with the same period of last year, the National Bureau of Statistics (NBS) said on Tuesday. The figure was the same as the previous 11-year monthly record set in August, after the CPI eased slightly to 6.2 percent in September. The overall increase of consumer prices reached 4.4 percent in the first ten months, compared with 4.1 percent for the Jan.-Sept. period. Analysts said the rebound of October CPI was largely due to higher pork and food prices. Food prices jumped 17.6 percent in October, 0.7 percentage points higher than September but 0.6 percentage points lower than August, the bureau said. In October, grain prices were up by 6.7 percent, pork prices 54.9 percent, meat and poultry 38.3 percent, oil 34.0 percent, aquatic products 7.0 percent, fresh vegetables 29.9 percent, and fresh fruit prices, 8.5 percent. Meanwhile, the prices of non-food products rose 1.1 percent. Transport and telecommunications prices dropped by 1.7 percent, clothes prices 1.3 percent, but housing prices were up 4.8 percent. The bureau said the CPI in October surged by 6.1 percent in cities and 7.2 percent in rural areas, but predicted inflation would slow down in November and December. The Producer Price Index (PPI) for China's industrial products rose by 3.2 percent in October from a year earlier, the bureau said on Monday. Chinese Premier Wen Jiabao said Monday his government would take measures to ensure sufficient supply and stabilize prices. "Prices have been on the rise these days and I'm aware that even a one-yuan (0.13 U.S. dollars) increase in prices will affect people's lives," said Wen during his visit to some needy citizens in Dongcheng District of Beijing. To improve people's incomes, Wen called on employers in the country to offer higher salaries and to strictly abide by the rules on minimum wages. "Only when people's quality of life is improved will we feel reassured and believe we did a good job," said Wen. To prevent prices from rising drastically, the government was trying to ensure adequate supply by giving support to the pig-raising, cooking oil and dairy industries and encouraging imports, said Wen. It was also cracking down on activities that attempted to force up prices far beyond real values, said Wen. Prices were stable from 2003 to 2006 but climbed rapidly this year, said Wen, adding that the recent price hikes were resulted from such factors as the rising oil and grain prices on the international market. Rising prices of pork and cooking oil pushed up prices of other foodstuffs even though China had enjoyed bumper harvests in the last four years and the country's grain output would reach a record 500 million tons this year, said Wen. China's Economy to grow at annual 11.2% rate in Q4 2007 China's surging economy is expected to cool during the fourth quarter as a result of central bank reserve tightening and interest rate hikes, a think tank report said on Monday. Gross domestic product (GDP) is expected to expand 11.2 percent in the fourth quarter, according to the State Information Center (SIC), a think tank under the auspices of the National Development and Reform Commission. Economic growth would hit 11.4 percent for the whole of 2007, slightly below the 11.5-percent increase registered in the first three quarters of the year, the report said. The economy is on track for a fifth year of double-digit growth. The previous full-year growth record was 11.1 percent, in 2006. The SIC report said the government's macroeconomic policies should continue to target overheating risks. The key inflation indicator, the consumer price index (CPI), would ease to 5.9 percent in the fourth quarter from 6.1 percent during the third quarter, which would help stabilize the full-year figure at about 4.6 percent, according to the report. The report urged the government to closely monitor prices. It said that prices of dairy products and seafood, which previously rose only slightly, required particular scrutiny. Otherwise, shortages of these items could cause price spikes next year, similar to the experience with pork prices. The SIC report said consumption would remain buoyant in the fourth quarter, the result of rising incomes and strong economic growth. It said inflation-adjusted retail sales for the whole year would grow 12.8 percent, 0.2 percentage points more than a year earlier. Fixed-asset investment, which contributes more to economic growth than consumption, would continue to expand in the fourth quarter. However, the growth of such investment would decelerate as a result of stricter controls on investment, according to the report. Macroeconomic control measures that were announced starting in the second and third quarters, including interest-rate hikes and higher reserve ratios for commercial banks, would help curb investment growth in the fourth quarter. In the latest move, the central bank, the People's Bank of China, on Saturday raised the reserve requirement ratio for the ninth time this year, pushing the ratio to a ten-year high of 13.5 percent. One-year benchmark interest rates have been raised five times so far this year to 7.39 percent, and investors expect more interest rate hikes. The SIC forecast said fixed-asset investment would rise 25.5 percent this year, up one percentage point from a year earlier. China's exports, another powerful engine of economic growth, would grow 22.5 percent in the fourth quarter, compared with 28.9 percent a year earlier. Export growth would be slowed by the decelerating US economy and reduced Chinese export tax rebates that took effect on July 1, it said. The report forecast the 2007 trade surplus at US$273 billion, up almost $100 billion from the 2006 figure of $177.47 billion. The think tank said the government should continue to curb energy use through tax and price measures, and it also urged the government to hasten price reform for petroleum products and electricity. It also advised the government to tighten fiscal discipline in the fourth quarter to help cool the economy. It was reported on Monday that China's trade surplus in October rose 13.5 percent over the same month last year to a new high of US$27.05 billion, according to the General Administration of Customs. The previous monthly record was US$26.9 billion in June. In October, exports reached US$107.73 billion, up 22.3 percent year-on-year yet down 0.5 percentage points over September. Imports grew to 80.67 billion U.S. dollars, up 25.5 percent or 9.4 percentage points higher than September. In its latest efforts to slow the pace of exports, China has discouraged foreign investment in export-oriented industries in the newly-issued guide for foreign investment. However, the trade surplus in the Jan.-Oct. period amounted to US$212.36 billion up 59 percent. The growth rate, however, was10.2 percentage points lower than the first nine months. The European Union remained China's largest trading partner, with the bilateral trade volume standing at US$287.5 billion from January to October, up 27.5 percent compared with the same period last year. The US and Japan are China's second and third largest trading partners, with the total trading volume both up around 15.7 percent to US$248.2 billion and US$191.9 billion, respectively. Exports in the first ten months reached US$985.84 billion, up 26.5 percent year-on-year and imports grew 19.8 percent to US$773.48 billion. © Copyright 2007 by Finfacts.com |
