In his Government Work Report, Chinese Premier Wen Jiabao proposed that the overall price increase this year would be kept no more than 4 percent. Economists attending the ongoing CPPCC annual session expressed their view that the goal is totally attainable, which may even turn out slightly lower than expected.
The price hikes last year are primarily caused by farm produce prices, especially grain, followed by those of construction materials and oil, said Lin Yifu, CPPCC member and economist. But this year, it's highly possible that the causes to the hikes may get eased or removed.
China's sharp growth in grain production last year will lead to lower prices of farm produce and grain, or will at least keep them stable; due to effective macro-control, investment growth on construction materials will slow down, causing stabilized or lower prices; international oil price had soared to around 50 dollars last year, hardly leaving any space for further growth.
CPPCC member and economist Xiao Zhuoji expressed his agreement. He believes that the price level this year will probably be lower than 4 percent as the government estimated. This is because: first, the tendency of raw material price hike dropped back recently; second, with more consumer goods than needed, the price of production means will not shoot up; third, last year's grain harvest may bring about a slower price increase of grain and farm produce.
By People's Daily Online