High risks of low prices

A lower-than-expected consumer price index (CPI), the latest sign that the Chinese economy is cooling more rapidly than most people have expected, is indeed a cause for caution, but not for panic.

With Wednesday's figures showing the country's wholesale inflation plummeting and exports falling year-on-year for the first time in seven years last month, many economists have rushed to further slash consumer inflation forecasts. They originally predicted that consumer prices would gain at least 3 percent after rising 4 percent in October.

Yet, the November CPI released yesterday obviously caught most of them in surprise. Inflation in the country eased for a seventh straight month to 2.4 percent, the lowest level in 22 months.