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Prices poised to hit pinnacle
By Wang Yanlin |
November 30, 2010, Tuesday
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Print Edition
Print Edition
CHINA'S consumer prices may reach this year's pinnacle in November and then moderate gradually under tougher policies to cut liquidity and combat speculation, analysts said.
The Consumer Price Index, the main gauge of inflation, may surge 4.8 percent from a year earlier this month, further accelerating from the jump of 4.4 percent in October, according to a report by the CITIC Securities Co.
The Industrial Securities Co expected CPI to climb 4.7 percent year on year in November. It can't be higher, like surpassing 5 percent, because price increase of commodities on the global market has turned tepid recently, it said.
"November's inflation rate may become the apex of this year," said Dong Xian'an, chief macro-economic analyst at Industrial Securities. "Coupled with a higher comparative base, policies intensively introduced in the last two weeks to tame inflation are taking effect."
China has tightened both monetary and administrative policies to cool sizzling consumer prices.
In the past two months, China twice lifted the reserve requirement ratio which demanded banks put aside a record 18.5 percent fund as reserves, and also raised interest rate last month, a day after inflation figures were released.
Ma Delun, vice governor of the People's Bank of China, yesterday said China's recent tightening policies aim at easing inflation and containing rapid increase of money supply. He said the central bank will make its currency policies more flexible, and a stable yuan is a long-term target of the central bank.
The National Development and Reform Commission, China's top economic planning agency, posted statements for four consecutive days last week to underscore its stern attitude towards capping inflation.
China's consumer prices reached a 25-month high in October, and the country is going to miss its yearly target of controlling inflation under 3 percent because inflation rate in the first ten months has already settled at 3 percent.
Runaway food prices drove this round of inflation again as food costs rocketed 10.3 percent last month. But unlike 2008, there was no pig disease this time to fuel pork prices, and the NDRC alluded to speculation as a major factor in pushing up the price of farm products this time.
Gong Fangxiong, managing director at JPMorgan of China, said China's inflationary pressure will ease gradually because it is relatively easy to put food prices under control if it is manipulated by speculators.
The Consumer Price Index, the main gauge of inflation, may surge 4.8 percent from a year earlier this month, further accelerating from the jump of 4.4 percent in October, according to a report by the CITIC Securities Co.
The Industrial Securities Co expected CPI to climb 4.7 percent year on year in November. It can't be higher, like surpassing 5 percent, because price increase of commodities on the global market has turned tepid recently, it said.
"November's inflation rate may become the apex of this year," said Dong Xian'an, chief macro-economic analyst at Industrial Securities. "Coupled with a higher comparative base, policies intensively introduced in the last two weeks to tame inflation are taking effect."
China has tightened both monetary and administrative policies to cool sizzling consumer prices.
In the past two months, China twice lifted the reserve requirement ratio which demanded banks put aside a record 18.5 percent fund as reserves, and also raised interest rate last month, a day after inflation figures were released.
Ma Delun, vice governor of the People's Bank of China, yesterday said China's recent tightening policies aim at easing inflation and containing rapid increase of money supply. He said the central bank will make its currency policies more flexible, and a stable yuan is a long-term target of the central bank.
The National Development and Reform Commission, China's top economic planning agency, posted statements for four consecutive days last week to underscore its stern attitude towards capping inflation.
China's consumer prices reached a 25-month high in October, and the country is going to miss its yearly target of controlling inflation under 3 percent because inflation rate in the first ten months has already settled at 3 percent.
Runaway food prices drove this round of inflation again as food costs rocketed 10.3 percent last month. But unlike 2008, there was no pig disease this time to fuel pork prices, and the NDRC alluded to speculation as a major factor in pushing up the price of farm products this time.
Gong Fangxiong, managing director at JPMorgan of China, said China's inflationary pressure will ease gradually because it is relatively easy to put food prices under control if it is manipulated by speculators.
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