Consumers respond to slowing CPI increase rate

Tag : Pork Collar

By Xinhua Writer Ji Shaoting
BEIJING, June 14 (Xinhua) -- Some Chinese have become moreconfident about their living conditions as the rate of increase inthe consumer price index (CPI) slowed in May, although broadpressures still exist.
"I found the prices of vegetables down recently. Grains are aboutthe same while pork prices are still very high," said Yu Guizhen, aretired college teacher shopping in an outlet of Wal-mart inBeijing.
Yu's sentiments reflect the CPI statistics released on Thursday.
The main gauge of inflation, the CPI, rose 7.7 percent year-on-yearin May, its first significant drop since last year, the NationalBureau of Statistics (NBS) said.
It fell from 8.5 percent in April and a 12-year high of 8.7 percentin February but was still much higher than the government's annualtarget of 4.8 percent.
The CPI is still mainly driven by food prices, especially porkprices, which rose 48 percent in May. However, the rate of increasewas down 20.3 points from April, while vegetable prices decreased15.7 percent compared with April.
The changes have been clearly felt by many ordinary Chinese, whosee more hope for improvement.
Deng Li, 24, who graduated last year and works in central China'sHunan Province, said restaurant prices had almost doubled in recentyears. Food prices also surged during the severe weather this pastFebruary in Hunan.
The CPI rose 7 percent in May in Hunan, down 0.8 point comparedwith April.
The drop eased Deng's concerns. "It proves the government'seconomic measures are starting to take effect, which gives me moreconfidence for the economy," she said.
"The decrease of the rate didn't surprise me at all, as expertshave made precise predictions and China's efforts on controllingprices have been obvious," said 39-year-old Yao Yun, seniorfinancial manager of an international company in Shanghai.
China's improving market prospects, especially in the Olympic year,convinced Yao's company to increase investment, which alsoincreased Yao's income, she said.
"I do not feel that much pressed" by rising prices," said Yao, whoearns more than 10,000 yuan (about 1,449 U.S. dollars) monthly.
The slower increase rate was in line with forecasts, and moredeclines were likely, said Zhang Liqun, a macroeconomist at theDevelopment Research Center of the State Council.
The major reason for the decline was an increasing supply of thefoods that had been in shortage, and this situation would persist,Zhang said.
Meanwhile, the trailing factor -- the influence of price changes onsubsequent indices --- had been decreasing during the past 12months, said Guo Tianyong, director of the bank research center,the Central University of Finance and Economics.
But some people are still concerned about the economic environment.
Not as fortunate as the white-collar workers, some lower-incomeworkers have been hurt more by higher prices and they expressedcomplaints.
A women in Beijing who identified herself as Mrs. Zhao said thatshe only went to the supermarket once a month, as she and herhusband had both lost their jobs.
Zhao hoped the government could take more measures to solve theproblem. She said she can only afford to buy meat for the childrenand the aged in her family.
Like other citizens, 67-year-old retiree Shi Ruilong in Shanghaialso complains sometimes, but he showed an understanding towardsthe Chinese government at the same time.
"The government has done a lot to control prices. You see, theincrease rate dropped in May," he said.
Life has been tougher than before for Shi and his wife, but he saidhe still can afford it.
"From the snow disaster to the recent earthquake, China has handledthe difficulties. The Olympics is coming, I believe our governmentwill take more actions on the price problem," Shi said.
Local reporters Pan Qing in Shanghai, Yang Yuhua in AnhuiProvince and Li Dan in Hunan Province contributed to this story.