Zhu Zhixin, vice minister of the National Development and Reform Commission, reported that China’s consumer price index, a major barometer for inflation, eased slightly to 6.2% in September after surging up to an 11-year monthly high of 6.5% in August. Some American newspapers saw that as the first prick in the bubble of inflation. It is not — but it made for strong headlines.

Zhu Zhixin ruled out sweeping price hikes in the future, but he did predict prices for farm produce, which triggered the CPI, would continue at a high level.

That September figure was a minor blip if you regard that consumer prices grew 4.1% year-on-year over the first nine months compared with 3.9% from January to August. About 86% of the rise, or 3.5 percentage points, was generated by food price hikes.

Zhu Zhixin said it is too early to say China’s economy has turned as the short supply of pork didn’t trigger ‘comprehensive, lasting and big price hikes’.

He predicted that the prices of grain crops will stabilize gradually as the summer grain crops harvest has surged 1.45 billion kilograms from the previous year to 115.35 billion kilograms this year while early rice output rose slightly to 31.95 billion kilograms.

Currently, most of the country’s industrial consumables remain in surplus. And the latest figures from the NDRC revealed that the average price of pork in Chinese shops has dropped 11% from its peak in August.

Zhu Zhixin warned against blind optimism, saying that the possibilities of an overheated economy remain while preventing the excess growth of consumer prices should be taken as a major task of macro-economic control.
Source: China.com