Inflation is expected to continue rising in the fourth quarter
alongside mounting wage uncertainties, according to a central bank
survey of 20,000 Chinese households last month.
Meanwhile, business leaders and bankers are growing more
concerned about the economy overheating, predicting more tightening
measures may be in the pipeline, according to two separate central
bank surveys for the third quarter.
About 61 percent of the respondents in 50 cities across China
said they expect consumer prices to rise further, according to a
quarterly survey by the People's Bank of China.
The survey, published on the central bank's website yesterday,
shows 47.1 percent of respondents said prices are too high, while
only 3.5 percent of those surveyed believe prices are at a
satisfactory level.
The consumer price index (CPI) for August accelerated to a
10-year high of 6.5 percent after it hit 5.6 percent in July. The
central bank has raised the interest rate for the fifth time this
year, partly to ease concern about a negative real interest rate on
bank deposits.
China's CPI is set to break the 4-percent mark this year, but
it's unclear how near it will get to 5 percent, said Hu Shaowei, a
senior economist with the State Information Center.
"It is normal for the public to respond strongly to a survey
like this," he said. "The commodity prices that have risen sharply
affect day-to-day life."
Consumers are feeling the pinch in the latest round of price
rises, in which food and grains have surged by the biggest
margins.
But income prospects are adding to concerns. The income
expectation index fell to 21 percent from 32.1 percent in the first
quarter of the year. And 10.2 percent of those surveyed said they
couldn't predict earnings for the coming quarter - the highest
level in three years.
The central bank also said confidence among company executives
and bankers fell in the third quarter on concern the economy may
continue to boom and become overheated.
(China Daily September 21, 2007)
