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China's consumer price inflation accelerated at the fastest pace in 11 years and the trade surplus again expanded, as the government struggles to restrain the supercharged economy. Consumer prices rose 6.9% in November from a year earlier after rising 6.5% October, the State National Bureau of Statistics (NBS) said today. "The latest figure indicates accelerating inflation pressure," NBS chief economist Yao Jingyuan told State news agency Xinhua. He said price jumps for foodstuffs, which have a weight of 33% in China's CPI, and oil price increases were the major driving forces behind the rise. Food prices ballooned 18.2% in November from a year earlier, compared with 17.6% in October. The bureau said food prices drove up the November CPI figure by 5.94%. Grain prices rose 6.6% over the same period last year, while cooking oil prices increased 35%. Pork prices, blamed for the recent increase in CPI figures, soared 56%. Non-food prices, however, rose only 1.4%, according to the bureau. China's consumer price index was forecasted to be around 4.7% for the whole year. It would be the highest yearly figure since 1997, Yao said. The prediction was higher than the 4.5% to 4.6% forecast made by the country's top statistician, Xie Fuzhan, late last month. The previous record for annual CPI rise was 8.3% in 1996. China's producer price index (PPI) rose 4.6% year-on-year in November, the largest monthly increase in more than two years, the bureau said Monday. The sharp PPI rise last month fuelled concern over further inflation caused by rising production costs. The rising CPI figures in recent months have been running contrary to earlier predictions that China's CPI would fall steadily later this year. The Chinese government has tightened rules for property lending and ordered State-owned companies to pay dividends after the trade surplus rose to a record $238 billion in the first 11 months of 2007. US Treasury Secretary Hank Paulson is currently in Beijing to again seek a removal of restriction on the yuan, to trigger a rise in its value against the US dollar. The trade surplus rose 14.7% to $26.3 billion in November from a year earlier, the third-biggest monthly total, the customs bureau said today. The $15.2 billion trade surplus with the US pushed the 11-month total with that country to $149.2 billion. Last week, the People's Bank of China last week ordered lenders to set aside 14.5% of deposits as reserves, up from 13.5%. China's one-year lending rate is at a nine-year high of 7.29% after five hikes this year. Zhou Xiaochuan, the governor of the People's Bank of China, said today that currency policy will be used to help reduce the trade gap. © Copyright 2007 by Finfacts.com |
