BEIJING, March 10 (Xinhua) -- China's consumer price
index (CPI), a main gauge of inflation, fell 1.6 percent year-on-year in
February, the National Bureau of Statistics (NBS) said Tuesday.
This was the first monthly fall since December 2002,
when prices slid 0.4 percent.
The CPI was unchanged month-on-month, the NBS said.
The producer price index (PPI), which measures
inflation at the wholesale level, fell for the third straight month, dropping
4.5 percent year-on-year in February, the NBS said.
It said in a statement that the February figure did
not represent a deflation problem in China, since money supply was ample because
of the proactive fiscal policy and the relatively easy monetary policy.
"We do face price downward pressure, but that cannot
be translated into a deflation problem," said Zhang Xiaoji, researcher with the
Development Research Center of the State Council, a government think tank.
Su Ning, vice governor of the People's Bank of China
(PBOC, the central bank), said Tuesday that deflation would not occur given
banks' ample liquidity.
FALLING WORLD PRICES
The NBS said falling international commodity prices,
caused by the global economic downturn, contributed to the domestic price fall.
The high statistical base of comparison from a year
earlier also contributed to the declines in prices, it said. Last February,
inflation hit a 12-year high of 8.7 percent.
But during February 2008, prices were affected by
transport disruptions caused by prolonged severe weather in much of China. Also,
the Lunar New Year fell in February last year, rather than January as it did
this year, and so holiday-related consumer spending shifted.
The agency said the CPI in the first two months of
2009 dropped0.3 percent from the same period last year.
The price declines "reflect how severely the economy
was affected by the global financial crisis in the second half of last year,"
said Zuo Xiaolei, chief economist with Galaxy Securities.
It would not be surprising if prices fell further in
the next few months, as both domestic and overseas demand had fallen since late
last year, said Wang Xiaoguang, economist with the National Development and
Reform Commission.
Also, he noted, there was a "commodity price bubble"
early last year that persisted until mid-year.
FIGHT AGAINST DEFLATION
China spent years striving to contain inflation and
runaway economic growth. But as the global slump began to affect the world's
third-largest economy, the government shifted focus to fighting deflation and
maintaining growth.
Yi Gang, PBOC vice governor, told Xinhua Saturday
that the central bank had sufficient tools to fight deflation.
He noted the country had not confronted a typical
deflationary period, which was characterized by contracting loans and money
supply, a recession and falling prices.
To prevent deflation, real loan growth this year was
expected to exceed 5 trillion yuan (735.3 billion U.S. dollars), Su said Tuesday
while discussing the new price figures.
China's money supply rose by 17.8 percent and 18.8
percent in December and January, respectively. New loans hit a record of 1.6
trillion yuan in January, double the year-earlier figure, and are expected to
have grown further in February.
MORE ROOM TO MOVE
Su told Xinhua on the sidelines over the weekend,
during the annual sessions of the country's legislative and political advisory
bodies, that China still had plenty of room to maneuver using monetary policy in
the face of the global financial crisis.
He said the benchmark deposit and loan interest rates
had been reduced five times since September and room for further adjustment was
"smaller but still exists."
There's also "much room for cutting banks' reserve
requirement ratios," which had been reduced four times since September, Su said.
China has set a full-year inflation target of 4
percent for 2009.
"The four percent target implies the highest
inflation level China could endure this year," said Zuo. There was no danger of
inflation in the next two or three years, she said, while deflation pressure was
rising.
OFFSETTING DECLINES
Zhuang Jian, senior economist with the Asian
Development Bank's China resident mission, said declining prices could hurt
corporate profit margins and reduce their desire to expand production.
The declines are "an indicator of falling confidence
amid the economic slowdown," said Ai Hongde, president of the Dongbei University
of Finance and Economics.
"The falling prices indicate some industries have
excess production, while consumers are unwilling to spend at will," he said.
He suggested the government should do more to boost
personal spending, which should function along with the massive investment
plans.
Deflationary pressure could ease in the second half
of the year if consumption was boosted, he said.
Zuo said falling prices provided an opportunity for
the government to further ease controls on commodity prices, especially those of
farm produce.
The consumer price index (CPI) in
January rose only 1 percent year-on-year, the lowest in 30 months, and the
other measure of inflation, the producer price index (PPI), dropped 3.3
percent.(Xinhua Photo) Photo
Gallery>>>
BEIJING, Feb. 11 -- The consumer price index
(CPI) in January rose only 1 percent year-on-year, the lowest in 30 months, and
the other measure of inflation, the producer price index (PPI), dropped 3.3
percent.
That prompted economists to say the economy may have
bottomed out and could start growing again within a few months.Full story
Citizens pick fruit at a supermarket in
Hefei, capital of east China's Anhui Province, Feb. 10, 2009. China's
consumer price index (CPI), a major gauge of inflation, went up 1.0
percent year-on-year in January this year, the National Bureau of
Statistics said on Tuesday. (Xinhua/Li Jian) Photo
Gallery>>>
BEIJING, Feb. 10 (Xinhua) -- China's consumer price index
(CPI), a major gauge of inflation, rose by 1 percent in January over the same
month last year, the National Bureau of Statistics announced Tuesday.
The rise was 0.2 percentage points lower than the previous
month. Full story
A salesman cleans up sauries at a market
in Yinchuan, capital of northwest China's Ningxia Hui Autonomous Region,
Jan. 22, 2009. China's consumer price index (CPI), the main gauge of
inflation, rose 5.9 percent last year after price pressures began to ease
in May, the National Bureau of Statistics (NBS) said Thursday. (Xinhua
Photo) Photo
Gallery>>>
BEIJING, Jan. 22 (Xinhua) -- China's consumer price
index (CPI), the main gauge of inflation, rose 5.9 percent last year after price
pressures began to ease in May, the National Bureau of Statistics (NBS) said
here Thursday.
The CPI was 1.1 percentage points higher than the
level in 2007,which was also the official target for 2008. Full story
