Latest News:  


CPI outlook may weigh on policy direction

(Shanghai Daily)

09:22, March 08, 2013

RISING inflationary pressure may force China to suspend supportive policies or tighten its monetary stance this month, analysts said before economic data for January and February are due out this weekend.

The Consumer Price Index, the main gauge of inflation, may rebound to around 3.2 percent in February, up from 2 percent in January and 2.5 percent in December, said Lu Zhengwei, chief economist at Industrial Bank.

"The increase is driven by much higher food prices during the Spring Festival holiday," Lu said, adding that such a sharp rise "will induce worries on inflation."

Tang Jianwei, an analyst at the Bank of Communications, was more conservative, forecasting a 2.9-percent rise in CPI for February.

"China has entered another phase of accelerating inflation with stabilizing domestic demand, higher labor costs and rising pork prices," Tang said. He predicted the CPI to grow moderately in the following months, and average between 3 and 3.5 percent this year.

In his government work report earlier this week at the ongoing National People's Congress in Beijing, Premier Wen Jiabao said China aims for inflation at or below 3.5 percent this year, lower than last year's 4 percent target but higher than the final rate of 2.6 percent.

Chang Jian, an economist at Barclays, said inflation and economic activities may add to concerns about the risk of further policy tightening.

"The monetary stance has already returned to neutral," Chang said. "We expect the central bank to continue to actively use repurchase agreements and reverse repurchase agreements to manage liquidity amid strong capital flows and to control credit growth."

Industrial Bank's Lu said more supportive policies or fast-tracked investment projects are not likely to unveiled.

Analysts projected faster growth in industrial production, fixed-asset investment and retail, whose data will be combined for January and February to eliminate the effects of the Spring Festival holiday.

We recommend:

Beihai, a Rising Young Star

China's jumbo jet C919 expected to fly

More loans extended to support agriculture

Direct trade in RMB increases in Thailand

Energy trade surplus for US

China seeks economic transformation

Email|Print|Comments(Editor:HuangBeibei、Liang Jun)

Leave your comment0 comments

  1. Name


Selections for you

  1. Navel landing ships perform military tasks

  2. Newly-recruited female soldiers in training

  3. 83rd Geneva Int'l Motor Show opens

  4. The best partners during ' two sessions'

  5. Yao Ming, the CPPCC Member

  6. 'Fresh style' in Chinese cities

  7. Grand Canal and Silk Road set for world heritage list

  8. Forever Shangri-la: heaven on earth

  9. Home tax worry addressed

  10. Foreign nuclear deals 'on way'

Most Popular


  1. Books for youngsters' the fastest-growing genre
  2. Life of the never-touch-a-pan generation
  3. Chinese films ought to tell Chinese stories
  4. Lei Feng spirit never out of date
  5. Call to relax adoption criteria
  6. China has its own Golden Raspberry Awards
  7. Chinese tourists reflect nation's character
  8. Spoiled brats spring from pampering parents
  9. A smile can succeed where a scowl fails
  10. Reducing income inequality an urgent task

What’s happening in China

Shanghai Disney Resort unveils resort concept

  1. China to develop poverty-stricken city
  2. Electric vehicle buyers will get car plates
  3. Court warns over deceits in online sales
  4. Beijing to control urban expansion: mayor
  5. Professionals called in to halt rising divorce rate