China's inflation slows to 6.2%

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China's inflation is finally showing signs of slowing. According to figures from the National Bureau of Statistics, the Consumer Price Index for August is down. This is compared to July when the rate hit a three-year high.

The Consumer Prices rose 6.2 percent in August from a year earlier, which is 0.3 percent lower than the previous month.

As a key contributor to inflation, year-on-year food price rises also slowed to 13.4 percent from 14.8 percent in July.

Producer prices, a gauge of upstream commodity prices, rose 7.3 percent last month, compared with a 7.5 percent jump a month earlier.

Some experts interpret this to mean that the worst is over and inflation is beginning to slow from now on.

But some other economists have different views.

Professor Huo Deming, Peking University, said, "I think we can't say inflation has peaked. There are a lot of seasonal factors affecting inflation. Usually inflation is lower in summer and autumn...It's important to look at the fundamentals."

It's believed that higher interest rates and lending curbs over the past few months are cooling the world's second-largest economy. But Professor Huo warns that inflation is "down but not out" and will remain high for the time being. He adds that while the cost of food is a main contributor to current price gains, bigger issues need to be examined.

"It looks like food price gains is a contributor, statistically, but economically it is not the whole truth.....there are other factors such as foreign trade surplus, which hit more than 50 billion in July..." Said Professor Huo.

To curb the sur! plus of cash in the market, the central bank has raised interest rates five times since last October and have increased reserve ratio requirements for the country's banks nine times during the same period.

Given the latest statistics, it's forecast that further controls will be on hold.

Editor:Zheng Limin |Source: CNTV.CN



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