China's CPI growth eases to 4.2% in November

Citizens buy vegetables in a supermarket in Chongqing, southwest China, Dec. 9, 2011. China's consumer price index (CPI), a main gauge of inflation, rose 4.2 percent year-on-year in November, further weakening from 5.5 percent in October mainly due to falling food prices, the National Bureau of Statistics said on Friday. The inflation rate in November was a 13-month low since October last year.


China's consumer price index (CPI), a main gauge of inflation, rose 4.2 percent year-on-year in November, further weakening from 5.5 percent in October mainly due to falling food prices, the National Bureau of Statistics (NBS) said on Friday.

The inflation rate in November was a 13-month low since October last year, according to the NBS data.

On a monthly basis, the cost of living dipped 0.2 percent in November,said the NBS in a statement at its website.

Taking the first 11 months together, the CPI rose 5.5 percent year-on-year in January-November, well above the government's full-year inflation control target of 4 percent.

Food prices, which account for nearly one third of the basket of goods in the nation's CPI calculation, went up 8.8 percent in November from a year earlier but dipped 0.8 percent month-on-month, according to the NBS.

Prior to the NBS announcement, many economists expected the November CPI to rise by between 4.2 percent to 4.4 percent year-on-year.

China's CPI hit a 37-month high of 6.5 percent in July this year.

China's Producer Price Index (PPI), a major measure of inflation at the wholesale level, rose 2.7 percent in November year-on-year, indicating subsiding inflationary pressure for December.
China's inflation controlled: former statistics official

With the central government's resolute efforts, the trend of surging prices this year has been controlled, said Yao Jingyuan, the former chief economist with the National Bureau of Statistics.

This round of inflation is not yet so serious in its time span, said Yao at the annual session of the China Real Estate Chamber of Commerce, which was held on Thursday in Shenzhen, in Guangdong province.

With fast economic growth, China's inflation has been comparatively low, and the galloping inflation that once appeared in 1988 and 1994 did not occur again, he said.

October's consumer price index (CPI) growth of 5.5 percent marked the slowest surge since an index of 5.5 percent in May, softening from 6.1 percent in September, 6.2 percent in August, 6.5 percent in July and 6.4 percent in June. Inflation concerns have been eased as the CPI has declined for the third consecutive month.

Even though its severity has been limited, this round of inflation has shown the features of structural inflation with surging food and housing prices, which directly affects the living standards of low-income residents, Yao said.

"It is significant for next year's economy that inflation has been controlled, but we still have many deep-seated issues, and we should maintain the current policies," he added.

China to lower RRR for first time in three years

The People's Bank of China, the country's central bank, said on Wednesday that it will lower banks' reserve requirement ratio (RRR) by 50 basis points for the first time in three years in order to replenish liquidity in the country's banking system as inflation eases.

The latest cut, effective on Dec. 5, drops the RRR to 21 percent for large commercial banks and 17.5 percent for mid- and small-sized banks. An estimated 396 billion yuan (62.38 billion U.S. dollars) in capital will be released into the market.