Too early to guess price trend

PMI has declined and economic growth is slowing down but CPI could remain high, preventing prices from falling

China's purchasing managers index (PMI), a key gauge of manufacturing activities, fell for a fourth straight month in July to a 29-month low of 50.7 percent and dropped by 0.2 percentage points from June's 50.9 percent. The better-than-expected figure indicates a mild slowdown in economic growth.

Should the consumer price index (CPI), a major gauge of inflation, also slow down in July after surging to a new peak of 6.4 percent in June, the government would take it as a positive sign that this year's macro-control has moved closer to its goal, and the central bank would ease the tight monetary policy in the second half of the year.