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CPI Adopts New System
China's governmental statistics agency Friday officially introduced a new statistical system for price indices that will bring China's price indices up to international standards.
The National Bureau of Statistics (NBS) also announced price indices of January indicating an improving economy.
The consumer price index for January is 1.5 per cent. Compared with last month, the change is 0.9 per cent.
The consumer price index (CPI), which takes a package of consumer goods prices into consideration, serves as the key barometer for inflation.
Instead of obtaining the CPI by comparing consumer prices to figures of the same period of the previous year, the bureau now derives the CPI by comparing consumer prices for a set period to prices for 2000, which serves as a fixed base.
The new CPI also covers more components than the old one.
The new way of composing the CPI is in line with the practices of official statisticians in other major economies.
The NBS said it would also release monthly consumer price changes, starting this year.
Economists say month-on-month figures are better at reflecting economic activity.
They say the new CPI, along with the month-on-month figures, will give a more accurate picture of economic development.
The old CPI lingered in negative territory for the entire year of 1998 due to over-production and weak consumer sentiment.
The index fluctuated in a very narrow range around zero last year, but has been on positive ground since October. The old CPI rose 1.3 per cent in November of 2000 and 1.5 per cent in December.
Since the beginning of 2001, some observers have been expressing their concern about inflation, as prices have seemed to be going up.
Source: China Daily
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