Deflation 'may force central bank's hand'

Further easing in consumer inflation and accelerating industrial deflation in November reflect stagnation in the world's second-largest economy, and that may push the central bank to cut banks' required reserve ratios as a means of easing liquidity and stabilizing growth, market observers said on Wednesday.

They said that China's top leaders may discuss a reduction in the 2015 Consumer Price Index target to 3 percent, from 3.5 percent this year, during the Central Economic Work Conference in Beijing. A statement will be issued when the meeting ends on Thursday.

The comments followed a report by the National Bureau of Statistics, which said that the CPI edged down to 1.4 percent year-on-year in November from 1.6 percent in October, the lowest level since December 2009.