Inflation will pose pressure on China's economy in the days to come because of various international and domestic factors, the National Bureau of Statistics declared on July 17 in Beijing.
Li Xiaochao, spokesperson for the NBS, explored factors that would possibly push inflation higher at the press conference today. The consumer price index (CPI), the major indicator of inflation, went down in June and May. However, Li warned that the current 7.9 percent increase in CPI for the first six months of the year was still high and there were risks of further upward movement.
First, the price hikes in the global market will have a significant impact on China. Both developing countries and developed countries are experiencing a soaring CPI. Primary products, particularly petroleum and food, have seen a more than 30 percent increase in prices.
Second, the rising producer price index (PPI) may combine with the new demand to boost prices. The PPI went up 8.2 percent in May and 8.8 percent in June. In addition, the recent increase in fuel and electricity prices and in the demand for construction materials in post-quake reconstruction will probably pose new pressures on prices.
Third, the general public expectats a higher CPI due to soaring prices both on the domestic and the international markets.
And fourth, preliminary estimates show that the tail-raising factor - the possible influence of the price changes in the first half year on the prospect of price changes in the second half - will push the CPI up by 1.8 percentage points.
Li stressed that the government would continue focusing its efforts on reining in the CPI rise to guard against inflation.
By People's Daily Online
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