Inflation rate exceeds target (2)

13:51, November 11, 2010      

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"Commodity price hikes victimize the poor and assist the rich," Tao told the Global Times Wednesday, adding that the low-income group will continue to bear the brunt of rising living costs unless their salaries reflect inflation growth.

Zheng Fengtian, deputy director of the School of Agricultural Economics and Rural Development at Renmin University of China, said the government should provide subsidies to low-income groups to help them maintain their basic living standards when inflation exceeds their salaries.

However, official figures seemed to have presented a different picture. The NBS said in July that the annual average income of urban workers in 2009 posted a 12 percent increase, year-on-year, but the full-year infla-tion dropped 0.7 percent.

"Ordinary residents' concerns about the rising inflation are on a month-to-month basis. But official inflation figures are on a year-to-year basis," Xu, at the CASS, said.

In its latest action to curb rapid credit growth, the central bank Wednesday ordered some banks to increase their reserve requirements by 0.5 percentage points, following a move last month to raise interest rates for the first time in nearly three years.

Yuan Gangming, an economist with the CASS Economic Institute, told the Global Times that, "The risk of inflation is overstated, and given the rapid economic expansion in China, the increase in the CPI figure is quite reasonable."

Zhu Shanshan and agencies contributed to this story

Source: Global Times
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