China will not witness overall, sustained price hikes, offic

During the first half of this year, price of food increased by 7.6% compared with the same period last year. Chinanews, Beijing, Aug 13 – Since the beginning of this year, consumer price index (CPI) in China has kept climbing, which has aroused great social concern. On Monday, a team of researchers from the State Council Development and Research Center published an article in People's Daily, saying that the current CPI rise is structural. Based on the overall supply and demand situation, it can be said that conditions are not available for China to back up an overall, sustained price rise, the article says.   The current price hike, as the article says, is mainly caused by the price rise in food. During the first half of this year, price of food increased by 7.6% compared with the same period last year. Food price rise contributed to CPI growth by 2.5 percentage points. If food price was not included, CPI only grew by 0.7 percentage point. The new round of food price rise occurred when Chinese food production was in a healthy condition. Such price rise was the result of an interest balance between urban and rural regions. From 2004 to 2006, China had a bumper harvest for three consecutive years. In 2007, China's grain production increased by 1.3% in summer. At present, grain supply is sufficient. Under market regulation, the supply of meat and eggs will also remain stable. So food price will not see a great rise in future, the article says.   Overall, the current round of price hike shows some structural features. While Chinese government should take active measures to control the prices of meat, eggs and other related foods, we should realize that at present, inflation still remain at a low level. If we calculate the core consumer price index (an index that excludes energy and food prices), we can see that the core consumer price in China only grew by 0.9% during the first half of the year, the article concludes.