BEIJING(AP)
China's inflation rebounded in April to near decade-high
levels, according to data released Monday, increasing pressure on
Beijing to cool rapidly ascending prices and avert possible unrest
ahead of the Summer Olympics.
The government also released data showing China's trade
surplus fell by 1 percent in April. That could help to ease
inflation by reducing the amount of money flooding into the booming
economy.
April's consumer prices rose 8.5 percent compared with the
same month last year, the National Statistics Bureau said. That was
up from March's 8.3 percent rate and just short of
February's 8.7 percent, the highest inflation in 12 years.
"It is still far too early to claim success in the battle
against inflation," Goldman Sachs economists Yu Song and Hong
Liang said in a report to clients.
Consumer prices have jumped since mid-2007, driven by food costs
that hit 22.1 percent in April. The government has been trying to
slow down the rising cost of pork, grain and other items by
boosting supplies and placing a ceiling on the price of basic
goods.
Meanwhile, the government ordered Chinese banks to increase the
amount of money they hold in reserve, the fourth time this year, to
curb lending and control inflation. The central bank raised the
amount of deposits that banks must keep in reserve by 0.5 percent
to 16.5 percent _ the highest level to date.
Economists say Chinese bank deposits are growing so fast that
the increased reserves have had no direct impact on lending, but
are meant as a signal to bankers to reduce credit.
Soaring food prices are especially worrisome to Beijing because
they hit China's poor the hardest.
There have been no reports of demonstrations, but inflation in
the 1980s and '90s set off protests _ an embarrassment that
communist leaders want to avoid ahead of August's Beijing
Olympics, which they hope will showcase China as a prosperous,
stable society.
A senior economic official, Vice Premier Wang Qishan, said
Friday that Beijing will stick to tight monetary policies to cool
inflation, but announced no new initiatives.
Beijing has raised interest rates repeatedly over the past two
years.
Prices began to rise in mid-2007 as China ran short of pork,
grain and some other basic goods.
The government has attempted to assure the public that China has
enough grain and is paying farmers to raise more pigs. Efforts to
boost food supplies, however, were hampered the most severe winter
storms in decades, which wrecked crops and disrupted shipping.
The sharpest inflation has been limited to food but costs of raw
materials and energy are edging up.
April's nonfood inflation was 1.8 percent, matching March,
which was the highest in more than a year, according to the
government data.
Producer prices rose 8.1 percent in April, driven by rising
energy costs, according to the government.
April's 22.1 percent rise in food costs was fueled by a 68.3
percent jump in the price of pork, a 46.6 percent increase in that
of cooking oil and a 13.6 percent increase for fresh
vegetables.
China's global trade surplus in April fell by about 1
percent from the same month last year to $16.8 billion amid weaker
global demand for Chinese goods, according to government data.
The trade surplus with Europe jumped by 34.8 percent to $12
billion (7.8 billion euros) while that with the United States saw
much slower growth, rising by 4 percent to $13 billion, according
to the Chinese customs agency.
The growing Chinese trade gap with the 27-nation European Union
has prompted the EU to join Washington in lobbying Beijing to ease
currency controls and import barriers.
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On the Net:
National Bureau of Statistics (in Chinese):
http://www.stats.gov.cn
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