Consumers respond to slowing CPI increase rate
Updated: 2008-06-14 10:37
BEIJING-- Some Chinese have become more confident about their living conditions as the rate of increase in the consumer price index (CPI) slowed in May, although broad pressures still exist.
"I found the prices of vegetables down recently. Grains are about the same while pork prices are still very high," said Yu Guizhen, a retired college teacher shopping in an outlet of Wal-mart in Beijing.
Yu's sentiments reflect the CPI statistics released on Thursday.
The main gauge of inflation, the CPI, rose 7.7 percent year-on-year in May, its first significant drop since last year, the National Bureau of Statistics (NBS) said.
It fell from 8.5 percent in April and a 12-year high of 8.7 percent in February but was still much higher than the government's annual target of 4.8 percent.
The CPI is still mainly driven by food prices, especially pork prices, which rose 48 percent in May. However, the rate of increase was down 20.3 points from April, while vegetable prices decreased 15.7 percent compared with April.
The changes have been clearly felt by many ordinary Chinese, who see more hope for improvement.
Deng Li, 24, who graduated last year and works in central China's Hunan Province, said restaurant prices had almost doubled in recent years. Food prices also surged during the severe weather this past February in Hunan.
The CPI rose 7 percent in May in Hunan, down 0.8 point compared with April.
The drop eased Deng's concerns. "It proves the government's economic measures are starting to take effect, which gives me more confidence for the economy," she said.
"The decrease of the rate didn't surprise me at all, as experts have made precise predictions and China's efforts on controlling prices have been obvious," said 39-year-old Yao Yun, senior financial 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 also increased Yao's income, she said.
"I do not feel that much pressed" by rising prices," said Yao, who earns more than 10,000 yuan (about US$1,449) monthly.
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