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The consumer price index (CPI), the main gauge of inflation, fell 1.8 percent in July while the producer price index was down 8.2 percent from a year earlier, according to data from the National Bureau of Statistics (NBS). The July figures were anticipated by the market. The inflation figure marked the sixth consecutive negative growth, or the lowest point this year, and followed a decline of 1.7 percent in June.
The CPI declined at a fast pace from March to June, but the decline in July was only 0.1 percentage point lower than that of the previous month.
Despite recent deflation, economists and analysts believe prices will begin to rise later in the year, with continued recovery in both the domestic and global economies. As of now, recent inflation readings have not dampened the surge in housing and stock prices, which is a major factor behind the "bubble-in-formation" notion.
The benchmark Shanghai Composite Index has rallied about 80 percent this year, while housing prices have returned to positive year-on-year gains. Chinese lenders extended 355.9 billion yuan of new loans, down from 1.53 trillion yuan in June, the People's Bank of China said on its website yesterday. Growth in China's broad M2 measure of money supply moderated to 28.4 percent in July.
Chinese officials recently reiterated the country's commitment to a moderately loose monetary policy, and at the same time emphasized that the country will balance growth in money supply and lending.
Industrial output expanded by 10.8 percent in July from a year earlier, the NBS said. Earlier data showed it increased by 7 percent for the first half of 2009.
Meanwhile, investment in urban fixed assets rose 32.9 percent in the first seven months of 2009 compared with the same period a year earlier, NBS said. It indicated a slight deceleration in July, given growth of 33.6 in the first half.  |
