(China) August CPI rises to 22-month high, PPI up 4.3 pct

pinxinge · 发表于 11-9-2010 17:44:00

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BEIJING - China's consumer price index (CPI), a major gauge to measure inflation, rose by a 22-month high of 3.5 percent in August from one year earlier, the National Bureau of Statistics (NBS) said Saturday.

The growth rate was 0.2 percentage points higher compared with that in July, the NBS said.

On a month-on-month basis, China's CPI grew 0.6 percent in August from July, NBS spokesman Sheng Laiyun said.

Food prices, which account for about one third of the weighting in calculating the CPI, climbed 7.5 percent year on year in August, according to NBS statistics. The pace of growth accelerated from the 6.8-percent rise in July and 5.7-percent growth in June.

The country's CPI increased 2.8 percent year on year in the first eight months of the year, accelerating from 2.7-percent increase in the January-July period. The Chinese government in March set a target of keeping the full-year inflation rate at around 3 percent this year.

The producer price index, a major measure of inflation at the wholesale level, rose 4.3 percent in August from a year earlier, slower from July's 4.8-percent growth, Sheng said.

pinxinge · 发表于 11-9-2010 17:46:38

You may feel the inflation if you buy egg or meat in the supermarket these days.
Compared with the beginning of the year, the price of egg and meat might have been risen for 20%.

rhoda · 发表于 11-9-2010 20:05:37

With the income gap between rich and poor being widened, inflation will have greater impacts on disadvantaged people. The Gini Coefficient has already been well above the alarming level, higher living costs could only make things worse.......

pinxinge · 发表于 11-9-2010 20:33:48

原帖由 rhoda 于 11-9-2010 20:05 发表

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With the income gap between rich and poor being widened, inflation will have greater impacts on disadvantaged people. The Gini Coefficient has already been well above the alarming level, higher living ...

Unfortunately, the farmers didn't get much benefit from the increase of food prices. Then, the question is, who is the winner of the inflation?

rhoda · 发表于 11-9-2010 22:09:48

I think it might be the wealthy people. Inflation is the devaluation of currency instead of assets. Thus if a person's assets are mostly real estates or other assets that constant revenue would be derived from, he might be immune from inflation to a large extent. On the other hand, given the high property price in China, it is nearly impossible for poor people to own their own houses. I believe there are still lots of people struggling to make ends meet. The statistical data seem inane, but there are really some sad stories in them.

原帖由 pinxinge 于 11-9-2010 20:33 发表

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Unfortunately, the farmers didn't get much benefit from the increase of food prices. Then, the question is, who is the winner of the inflation?

lisa2008 · 发表于 11-9-2010 22:26:40

Have you read the news today? It said National Bureau of Statistics (NBS) yesterday published that property prices in the nation's 70 major cities grew by 9.3 percent in August, and, this was "the slowest pace so far this year" (eg: in July the growth was 10.3%)

lisa2008 · 发表于 11-9-2010 22:29:56

this means in average property price has grown by at least 9.3% x 8 = 74.4% since beginning of this year in the 70 major cities.

[ 本帖最后由 lisa2008 于 11-9-2010 22:31 编辑 ]

pinxinge · 发表于 11-9-2010 22:40:10

原帖由 lisa2008 于 11-9-2010 22:29 发表

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this means in average property price has grown by at least 9.3% x 8 = 74.4% since beginning of this year in the 70 major cities.

Lisa, this time I can not agree with you, I think it is the year to year growth rate.

Which means if the average price is 10000 in Aug 2009, then in Aug 2010 the average price is 10930.

lisa2008 · 发表于 11-9-2010 22:56:24

原帖由 pinxinge 于 11-9-2010 22:40 发表

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Lisa, this time I can not agree with you, I think it is the year to year growth rate. Which means if the average price is 10000 in Aug 2009, then in Aug 2010 the average price is 10930.

i just had a double look at the article, you probably are correct

lisa2008 · 发表于 11-9-2010 22:58:31

here is the news - i ignored the first paragrah as the the nubmer in 2nd paragraph was too eye catching

Property price growth slows in major cities
By Yang Ning (China Daily)
Updated: 2010-09-11 11:24 Comments(0) PrintMail Large Medium Small
BEIJING - Housing prices in China rose at the slowest pace in eight months from a year earlier in August, while the prices on a monthly basis remained unchanged from July, indicating that buyers and sellers are still cautious, industry analysts said.

Property prices in the nation's 70 major cities grew by 9.3 percent in August, the National Bureau of Statistics (NBS) said on Friday.

That marks a fall from the 10.3 percent growth in July, the slowest pace so far this year.

Related readings:
China's property prices rise 9.3% in August
Stocks fall most in two weeks on property concerns
New flats to help restrain property prices
Property developers drive Chinese share market lower - Sept 1

However, the month-on-month figures for property prices remained unchanged for two months after witnessing a 0.1 percent decline in June, the first decrease in 16 months.

New home prices rose 11.7 percent in August compared with 12.9 percent in July this year.

"The figures show that the nation's real estate market is still stagnant. Developers and consumers are cautious as they are not sure of the future trend," said Zhou Jingtong, a senior economist with Bank of China.

"The downtrend in prices will continue for some time due to the government's tightening policies," he said.

Property developers raised 4.44 trillion yuan ($653 billion) of funds from January to August this year. Nearly 1.66 trillion yuan was raised by the companies themselves, while 846 billion yuan came from bank loans and 574.5 billion yuan from individual mortgages, said the NBS.

"The financing pressures for developers indicates that the downtrend in the market may continue for some time," said Zhou.

Dong Xian'an, chief macroeconomist at Industrial Securities, said there is very little chance of housing prices recovering in the short-term.

"Housing prices may drop in the fourth quarter of this year and the beginning of next year, as it is slack season for the real estate market," he said.

Since April, the government has launched a series of measures to cool the over-heated property market.

The policies include tightening scrutiny of developers' financing, limited loans for third-home purchases, and higher down-payment requirements for second-home purchases.

Investment in property development rose 34.1 percent year-on-year to 449 billion yuan in August, compared with 33 percent for July and 36.7 percent gain for the first eight months, according to the

lisa2008 · 发表于 11-9-2010 23:09:09

if property price growth was 9 ~ 10% in average this year comparing with that of last year, i think it's OK considering even food price grew 7.5% in Aug.

pinxinge · 发表于 11-9-2010 23:58:39

原帖由 lisa2008 于 11-9-2010 22:56 发表

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i just had a double look at the article, you probably are correct

I know that just because I'm still in China and I clearly know what happens here.

Everyone in BJ knows after April the property price dropped due to the tight policy.
Now the property price is dropping, while the food price is increasing.
Last Friday, there is a rumor saying that the interest rate will increase this weekend due to the CPI statistic report. What will happen next?

[ 本帖最后由 pinxinge 于 12-9-2010 15:19 编辑 ]

pinxinge · 发表于 12-9-2010 15:20:38

source: chinadaily.com.cn
Although China's inflation rate quickened to a 22-month high, economists said it is not cause for worry as the bulk of the price increases came from higher food costs that were caused by adverse weather conditions, which will not last.

The consumer price index (CPI), a major gauge of inflation, rose 3.5 percent from a year earlier in August, the second consecutive month the CPI has exceeded the government's full-year target of 3 percent.

Food prices, which have about a one-third weighting in the calculation of the CPI, climbed 7.5 percent year on year in August, according to NBS statistics. The pace of growth quickened from the 6.8-percent rise in July and 5.7-percent growth in June.

The CPI grew 0.6 percent in August from July. For the first eight months, it increased 2.8 percent year on year.

Analysts expect the CPI to ease in the fourth quarter.

Zhu Jianfang, chief analyst at Citic Securities, said the pace of food price increases is likely to ease from September and that the chances of an interest rate hike are slim.

"With proper regulation for the rest of the year, it is still feasible to realize the government's full-year inflation control target," Sheng said.

Renowned economist Fan Gang said on Friday on a forum in Shaoxing, Zhejiang Province that food prices are expected to remain stable this year and no serious inflation is anticipated in the second half.

The manufacturing industry has overcapacity, which does not support serious inflation, said Fan, director of the National Economic Research Institute.

He said food prices in China will remain stable in the second half of this year because international food prices haven't seen large fluctuations, despite Russia's ban on grain exports until the end of the year.

Meanwhile, China's annual grain production has recorded increases for six consecutive years, he said.

The impact on grain harvests from natural disasters that hit some regions this year would remain manageable, he said.

[ 本帖最后由 pinxinge 于 12-9-2010 15:28 编辑 ]

pinxinge · 发表于 12-9-2010 15:27:56

原帖由 lisa2008 于 11-9-2010 23:09 发表

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if property price growth was 9 ~ 10% in average this year comparing with that of last year, i think it's OK considering even food price grew 7.5% in Aug.

More and more people began to accept the price of properties in Beijing, especially for those who have improvement demand.

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[News] (China) August CPI rises to 22-month high, PPI up 4.3 pct

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Inflation not a concern