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Tuesday, September 11, 2007

Inflation Continues To Rise in August

Soaring food prices propelled China’s annual consumer price inflation to 6.5 per cent in August, the fastest pace in nearly 11 years, raising expectations that the central bank will defy the global trend and keep raising interest rates. The inflation rate published today, up from 5.6 per cent in July, was the highest reading since December 1996.

Also, according to the National Bureau of Statistics proucer prices keep rising too:

In August, Producers’ Price Index (PPI) for manufactured goods up by 2.6 percent from the same month last year; purchasing prices for raw material, fuels and power rose by 3.8 percent.

PPI for means of production increased 2.2 percent over last August. Of the total, PPIs for mining and quarrying industry increased 1.4 percent; that for raw materials industry and manufacturing industry correspondingly up by 3.9 and 1.5 percent; that for means of consumer goods grew 3.5 percent. Of which, price for foodstuff increased 8.6 percent; that of clothing and commodities rose 1.2 and 1.8 percent respectively, while that for durable consumer goods dropped 0.5 percent.

Fixed asset investment continues to be very high:

From January to July, urban investment in fixed assets hit 5,669.8 billion yuan, a rise of 26.6 percent year-on-year. Of the total, state -owned and state controlled enterprises invested 2,431.7 billion yuan, surging 16.5 percent; real estate development enterprises valued at 1,213.5 billion yuan, rose by 28.9 percent.

and In July, the total retail sales of consumer goods reached 699.8 billion yuan, a year-on-year increase of 16.4 percent.

While in August, according to a news release today China's retail sales grew at the fastest pace in more than three years, buoyed by higher prices and rising incomes in what must surely be the world's fastest-growing major economy. Sales climbed 17.1 percent in August from a year earlier to 711.7 billion yuan ($95 billion) after gaining 16.4 percent in July.

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