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Rising prices beat confidence
By Wang Yanlin |
November 18, 2010, Thursday
|
Print Edition
Print Edition
RISING prices have eroded confidence among Chinese consumers, which fell for the first time in six quarters, an index showed yesterday.
The Chinese Consumer Confidence Index dropped to 104 in the third quarter from 109 in the previous three months, according to a study jointly released by the Economic Monitoring and Analysis Center under the National Bureau of Statistics and the Nielsen Co.
"Inflation, triggered mostly by surging food costs, has become a major concern among consumers, especially low-income families," said Pan Jiancheng, deputy director general of the center.
He added that the key to curbing inflation "is to increase supply."
China's Consumer Price Index, a main gauge of inflation, surged to a 25-month high of 4.4 percent in October. Food costs, which account for one-third of the CPI basket, rocketed an annual 10.1 percent.
Premier Wen Jiabao said on Tuesday that the Cabinet is drafting measures to counter excessive price gains. The National Development and Reform Commission, the country's top economic planning agency, may impose controls on food prices, offer subsidies to shoppers and crack down on commodity speculation to curb price hikes.
The Ministry of Commerce also said China will release stockpiles of pork and sugar into the market in a bid to tackle double-digit rises in food prices as part of administrative measures to tame inflation.
In the first 10 months, China's consumer prices jumped 3 percent from a year earlier.
The government has set a target of keeping inflation below 3 percent for the year. But with only two months left in 2010, it is already impossible to realize that target.
Zhang Ping, head of the NDRC, admitted last week that China may miss its 3 percent goal, the first such acknowledgement from a senior government official.
China has lifted the reserve requirement ratio and the benchmark interest rates in the past two months to soak up liquidity as part of steps to battle inflation, but more measures are needed, analysts said.
The Chinese Consumer Confidence Index dropped to 104 in the third quarter from 109 in the previous three months, according to a study jointly released by the Economic Monitoring and Analysis Center under the National Bureau of Statistics and the Nielsen Co.
"Inflation, triggered mostly by surging food costs, has become a major concern among consumers, especially low-income families," said Pan Jiancheng, deputy director general of the center.
He added that the key to curbing inflation "is to increase supply."
China's Consumer Price Index, a main gauge of inflation, surged to a 25-month high of 4.4 percent in October. Food costs, which account for one-third of the CPI basket, rocketed an annual 10.1 percent.
Premier Wen Jiabao said on Tuesday that the Cabinet is drafting measures to counter excessive price gains. The National Development and Reform Commission, the country's top economic planning agency, may impose controls on food prices, offer subsidies to shoppers and crack down on commodity speculation to curb price hikes.
The Ministry of Commerce also said China will release stockpiles of pork and sugar into the market in a bid to tackle double-digit rises in food prices as part of administrative measures to tame inflation.
In the first 10 months, China's consumer prices jumped 3 percent from a year earlier.
The government has set a target of keeping inflation below 3 percent for the year. But with only two months left in 2010, it is already impossible to realize that target.
Zhang Ping, head of the NDRC, admitted last week that China may miss its 3 percent goal, the first such acknowledgement from a senior government official.
China has lifted the reserve requirement ratio and the benchmark interest rates in the past two months to soak up liquidity as part of steps to battle inflation, but more measures are needed, analysts said.
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