China's overall consumer price level will continue
to rise in the second half of this year on top of a 3.2 percent growth in the
first six months, the country's top planning agency said on Wednesday.
"We feel that the prices are climbing slowly, in a relatively steady manner,"
said Cao Changqing, pricing department director of the National Development and
Reform Commission (NDRC) at a press conference.
The scale of the increase will depend
on the harvest this autumn, Cao noted, as food stuffs are the main factors
driving this year's price rise.
Cao Changqing, pricing department
director of the National Development and Reform Commission answers a
question at a press conference in Beijing.
The Consumer Price Index, a barometer of inflation, grew 3.2 percent in the
first half of the year, and 4.4 percent in the second quarter, the fastest
growth in 34 months. Up to 78 percent of the 3.2 percent rise in the first six
months came from food price increases.
The accelerating inflation pushed the real interest rates further into
negative territory, prompting regulators to raise interest rates and slash
income tax on bank deposits on July 20.
Prevention of overheating is top priority
The prevention of overheating is the most important macro-economic control
task in the second half of this year, said Zhu Hongren, vice-director of the
macro-economic development department under the NDRC.
The government "will use economic and legal policy tools to cool the growing
pace of the economy, " Zhu told the media.
China's Gross Domestic Product expanded by 11.9 percent in the second quarter
and by 11.5 percent for the first half of the year.
Fixed-asset investment in urban areas jumped 26.7 percent higher in the first
half from a year earlier, up from 25.3 percent in the first quarter, while
industrial output climbed 19.4 percent in June.